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 actions taken by the employer with respect to the participant contributions that become plan assets, other than the actual contribution of such assets to the employee benefit plan s trust or the actual payment of welfare benefits for employees, would be a violation of ERISA section 406(b)(1) and (2). Although the failure to forward participant contributio
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- What prohibited transactions result from an employer being delinquent in forwarding participant contributions to the plan?
