EBSA Issues Contribution Time Frame Guidance

May 8, 2003 (PLANSPONSOR.com) - Investigators with the US Department of Labor's Employee Benefits Security Administration (EBSA) can consider the length of time for forwarding participant contributions in multiemployer 401(k) plans as set out in union contracts.

>However, in its Field Assistance Bulletin (FAB) 2003-02, the EBSA said that investigators can’t extend the time limit for when contributions have to officially become plan assets beyond that set out in a DoL 1996 regulation.

>Under the 1996 rule, amounts that a participant has paid to or has withheld by an employer for contribution to a plan becomes plan assets as of the earliest date on which such contributions reasonably can be segregated from the employer’s general assets but in no event later than the 15 th business day of the month following the withholding.

>Under the FAB, in order for the time frames in the agreements to be considered, plan trustees must first determine that they reflect the appropriate balance of the costs to the plan of collecting the contributions and the protections to plan participants.   

For more information, go to    www.dol.gov/ebsa .