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DOL ANNOUNCES AMNESTY PROGRAM FOR
401(K) PLANS

The Department of Labor (DOL) has announced an amnesty program for 401(k) plan sponsors that have failed to remit employees' contributions to their plan on a timely basis. Under DOL guidelines, employers that sponsor 401(k) plans have limited time after employees' contributions are withheld to deposit those contributions with the plan. Failure to make these deposits promptly may result in penalties assessed by the DOL and potential criminal prosecution.

This amnesty program, called the Pension Payback Program, is available only for employers with delinquent contributions that do not exceed a specified amount and have not previously been notified by the DOL that their 401(k) plan is under investigation. To participate, an employer must contribute all delinquent 401(k) contributions to the plan with interest. An employer must then notify the DOL on or before September 7, 1996, and show evidence that it made the corrective contribution.

Although the DOL will not take any subsequent enforcement actions, the amnesty program does not relieve employers of possible legal action by plan participants or state criminal prosecution. As a result, employers that wish to participate in this program should consult with their legal counsel and an employee benefits specialist. *

Article courtesy of Deloitte & Touche Review, March 18, 1996.



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