Retirement Plan Contributions | The DOL Cracks Down

DOL Cracks Down on Retirement Plan Contributions

piggy bankAs a follow up to my article Depositing 401(k) Contributions On Time, the Department Of Labor (DOL) is taking further steps to protect the assets of employer retirement and health plans.  The DOL has recently announced the roll-out of a new Retirement Security Initiatives program. This program serves not only to enforce employer rules for making timely deposits into employee benefit plans and investigating employer plan practices, but also to educate employees and notify them of their rights.

When it comes to protecting employee benefits, the DOL isn’t messing around.  In past years, the DOL has conducted numerous investigations into employers who did not deposit their employee contributions and instead used the money for another use unrelated to the retirement plan.  Recently, the DOL has filed 24 new civil suits on 11/16/10.  The DOL has also launched a new Contributory Plans Criminal Project to investigate individuals and service providers who have committed fraud against the plan.  The above fact sheet illustrates several recent criminal prosecutions which have resulted in prison sentences.

According to the DOL press release, “Workers are often the first line of defense in identifying problems with their benefit programs early,” said Phyllis C. Borzi, assistant secretary for EBSA. “Therefore, we want to equip them with information to help the department protect and preserve their right to plan benefits.”  The DOL has issued a publication geared toward employees called Ten Warning Signs That Your 401(k) Contributions Are Being Misused.

To stay off of the DOL naughty list, you must deposit your employees’ contributions into the plan as soon as administratively feasible, and do not use employee contributions for any other purpose other than for their benefit under the plan.

For more information see the DOL Retirement Security Initiatives Fact Sheet.

Stay up to date on the latest payroll tips and training

You may also be interested in: