Maybe a 401(k) Salary Deferral Procedure should be a thing?

I recently go through a harrowing Department of Labor (DOL) audit over the late deposit of salary deferrals. What was the problem for the client was multiple locations and multiple payroll providers and previous third-party administrators (TPAs) that didn’t alert the client that this was a problem.

As part of resolving this issue with the DOL auditor, I suggested a salary deferral procedure, a written policy that details the issues regarding late deposits and how the plan sponsor was supposed to make sure it didn’t happen again and what steps they would take if it did.

It’s not a masterpiece, but it gives a good explanation of why late deferrals is a big thing and the steps that the employer to make sure this isn’t a recurring issue.

If interested in this policy for your plan sponsor clients, you know where to reach me.

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