FAQs about Reporting Delinquent
Participant Contributions on the
Form 5500
What is the purpose of this FAQ guidance?
The purpose of these FAQs is to provide guidance to plan administrators and accountants on
complying with the requirements of the 2003 Form 5500 Annual Return/Report of Employee
Benefit Plan for reporting delinquent participant contributions on Line 4a and Line 4d of the
Schedules H and I.
What were the Form 5500 reporting requirements for delinquent participant
contributions prior to plan year 2003?
Since 1995, the Employee Benefits Security Administration (EBSA) has pursued an aggressive
enforcement project intended to safeguard employee contributions to 401(k) plans and health
care and other welfare plans by investigating situations in which employers delay in forwarding
participant contributions to employee benefit plans.
As part of that effort, plan administrators who are required to file Form 5500 financial
information on a Schedule H (large plans) or Schedule I (small plans) must report on Line 4a
of the schedule whether an employer failed to transmit to the plan any participant
contributions within the time period set forth in the Department’s plan asset regulation at 29
CFR § 2510.3-102. Under the regulation, amounts paid by a plan participant or beneficiary or
withheld by an employer from a participant’s wages for contribution to a plan are plan assets
on the earliest date that they can reasonably be segregated from the employer's general assets,
but in no event later than (i) for pension plans, the 15th business day of the month following
the month in which the participant contributions are withheld or received by the employer
and (ii) for welfare plans, 90 days from the date on which such amounts are withheld or
received by the employer.
Also, when an employer is delinquent in forwarding participant contributions and holds them
commingled with its general assets, the employer will have engaged in a nonexempt prohibited
transaction under ERISA section 406. Line 4d on the Schedule H and Schedule I required plan
administrators to report delinquent participant contributions as nonexempt prohibited
transactions unless the requirements for the DOL Voluntary Fiduciary Correction Program
(VFCP) were met, and the conditions of PTE 2002-51 were satisfied. Plans filing Schedule H
that report nonexempt prohibited transactions on Line 4d also are required to file a Schedule
G to report detailed information regarding the nonexempt prohibited transactions.