In its Final Rule pertaining to the safe harbor deadline for depositing contributions in small employee benefit plans (see my blog of January 14), the Department of Labor (the “DOL”) clarified that:
–the deposit of plan loan repayments received or deducted from pay by the employer are subject to the deposit deadlines applicable to employee plan contributions in the ERISA regulations; and
–the new safe harbor deadline for depositing employee plan contributions in a plan with under 100 participants- deposit required within 7 business days of receipt – is available for loan repayments.
The preamble to the Final Rule says:The DOL had proposed to amend paragraph (a)(1) of § 2510.3-102 of the ERISA regulations to extend the application of the regulation to amounts paid by a participant or beneficiary or withheld by an employer from a participant’s wages for purposes of repaying a participant’s loan (regardless of plan size). See Advisory Opinion 2002-02A (May 17, 2002). The proposal also served to extend the availability of the 7-business day safe harbor to loan repayments to plans with fewer than 100 participants.The Final Rule adopts these proposals