The Department of Labor (DOL) recognizes that some employers and service providers acting on the employer’s behalf, such as payroll processing services, located in identified covered disaster areas will not be able to forward participant payments and withholdings to employee retirement benefit plans within the prescribed timeframe. In such instances, the DOL will not – solely on the basis of a failure attributable to Hurricane Harvey – seek to enforce the provisions of Title I with respect to a temporary delay in the forwarding of such payments or contributions to an employee pension benefit plan to the extent that affected employers, and service providers, act reasonably, prudently and in the interest of employees to comply as soon as practical under the circumstances.
Nova 401(k) Associates encourages clients to use this relief cautiously. We are appreciative of the DOL relief, but clients need to understand that timely deposits of 401(k) contributions and loan repayments is an enforcement priority for the DOL. Please deposit your 401(k) contributions and loan repayments as soon as practical after Hurricane Harvey. We suggest that you resume your regular deposit schedule for 401(k) contributions and loan repayments at the same time you resume your regular schedule for payroll tax withholdings. If that is not possible, document why in the event it comes up on a CPA or DOL audit.