IMPORTANT NOTICE TO 401K PROVIDERS
TO: Our 401(k) Clients
FROM: Northeast Planning Services, Inc.
RE: TRANSMISSION OF 401K SALARY DEFERRALS TO YOUR PLAN
On February 29, 2008, the Department of Labor (DOL) published proposed regulations that pertain to the timing of 401(k) deposits in the small plan market (those with fewer than 100 participants). The regulations provide that 401(k) deferrals deposited no later than the seventh business day after the deferrals were withheld from the paycheck will be deemed a timely deposit. This is considered the safe harbor period. This applies to loan repayments also.
We urge you to review your remittance procedure and evaluate the timing of deposits in light of this new guidance. We recommend you make the changes to your submission process, if you are not currently meeting the seven day safe harbor period.