EBSA Press Release: Amendment of ERISA Plan Asset Rules to Provide Guidance for Simple Plans Involving IRAS [03/27/1997]

Archived News Release — Caution: Information may be out of date.

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The U.S. Department of Labor has proposed a rule governing the timing of deposits by employers of participant contributions to Savings Incentive Match Plans for Employees (SIMPLE plans) involving IRAs.

SIMPLE plans were established by the Small Business Job Protection Act of 1996 as a tax-favored way to provide for employees' retirement without having to meet many of the requirements for tax-qualified plans. This proposed rule will harmonize the rules under Title I of the Employee Retirement Income Security Act (ERISA) with the Internal Revenue Code rules that set the time limits within which employers must deposit employee contributions to SIMPLE plans involving IRAs.

ERISA's general plan asset rule requires all employers who maintain Title I plans for their employees to deposit employees' contributions to the plans as soon as they can reasonably be segregated from the employer's general assets but in no event later than 15 business days following the month in which employers either withhold the money from employees' paychecks or receive checks for the contributions.

Under the proposal, the maximum time that an employer would have to deposit participant contributions to a SIMPLE plan involving IRAs would be no later than 30 days following the month in which those amounts would otherwise have been payable to the participant.

The comment period on the proposal, published in today's Federal Register, will end on May 27. If adopted, the rule will become effective 30 days following the close of the comment period.

Archived News Release — Caution: Information may be out of date.