Labor Defines When Wages Are ‘Plan Assets’

WASHINGTON (CN) - The Labor Department's Employee Benefits Security Administration has established a "safe harbor" period during which funds from employees, or funds withheld from wages, for contribution to certain employee benefit plans, do not constitute "plan assets" under Title I of the Employee Retirement Income Security Act and the related prohibited transaction provisions of the Internal Revenue Code.

This regulation is to enhance the clarity and certainty for many employers as to when participant contributions are treated as contributed in a timely manner to employee benefit plans.

This final regulation affects the sponsors and fiduciaries of contributory group welfare and pension plans covered by ERISA, including 401(k) plans, as well as the participants and beneficiaries covered by such plans and recordkeepers, and other service providers to such plans. Click the document icon for this regulation and others.

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