|- ERISA Fiduciary Advisor|
What are the fiduciary responsibilities regarding employee contributions?
If a plan, such as a 401(k) plan, provides for salary reductions from employees’ paychecks for contribution to the plan, then the employer must deposit the contributions in a timely manner.
The law provides a definition of what is timely. It requires that participant contributions be deposited in the plan as soon as it is reasonably possible to segregate them from the company’s assets, but no later than the 15th business day of the month following the payday. However, it is very important to note, that if employers can reasonably make the deposits sooner, they are required to do so.