4
What disclosure is required if the IQPA determines that the Line 4a information is
not presented in accordance with DOL’s regulatory requirements?
As with any other information required to be presented on supplemental schedules, when the
auditor concludes that the scheduled information required by Line 4a does not contain all the
required information or contains information that is inaccurate or is inconsistent with the
plan’s financial statements, the auditor must consider, depending on the nature of the problem
and the type of information, either modifying his or her report by adding a paragraph to
disclose the omission of the information, or expressing a qualified or an adverse opinion on the
supplemental schedules, as appropriate. See AICPA Audit and Accounting Guide for
Audits of Employee Benefit Plans at paragraphs 13.09 through 13.19.
Must all delinquent participant contributions be reported on Line 4a or only those
that are nonexempt prohibited transactions?
Schedule H and Schedule I filers must report all delinquent participant contributions for the
plan year on Line 4a regardless of whether they have been corrected under the VFCP and the
conditions of PTE 2002-51 have been satisfied.
Must delinquent participant contributions continue to be reported on Line 4a for
every year until they are corrected?
If participant contributions were transmitted to the plan late during Year 1, and the violation
was not corrected until sometime during Year 2, the total amount of the delinquent
contributions should be included on Line 4a of the Schedule H or I for Year 1 and should be
carried over and reported again on Line 4a of the Schedule H or I for each subsequent year
until the year after the violation is corrected.
Are there any circumstances where delinquent participant contributions still
should be reported on Line 4d or Schedule G?
Delinquent participant contributions must be reported on Line 4a and should not be reported
on Line 4d or Schedule G.
What prohibited transactions result from an employer being delinquent in
forwarding participant contributions to the plan?
With respect to the prohibited transaction provisions of ERISA section 406, the employer of
employees covered by the plan is a party in interest with respect to the plan under ERISA
section 3(14)(C). The failure to segregate and forward participant contributions to a plan from
the general assets of the employer in the time frames prescribed by 29 CFR § 2510.3-102
would result in a prohibited use of plan assets in violation of section 406(a)(1)(D) of ERISA.
Similarly, because an employer who retains plan assets commingled with it general assets
would be a fiduciary with respect to those assets pursuant to ERISA section 3(21)(A)(i), any