Palmer Pension Services, Inc.


Palmer Pension Services, Inc.
4343 Shallowford Road
Suite 320
Marietta, GA 30062
(678) 215-0909 Phone
(678) 215-0999 Fax

2024 Pension Plan
Limits Released
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CARES Act Update
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Timing of Participant 401(k) Deferrals and Loan Payments

The IRS and DOL require that 401(k) deferrals and loan payments must be deposited as soon as they can be reasonably segregated from the Employer’s assets. In January 2010 the DOL published a 7 Day Safe Harbor Rule for 401(k) plans with fewer than 100 participants. This regulation means that deposits of all Participant deferrals and loan payments must be deposited within 7 business days of being withheld from an Employee’s paycheck. Failure to do so may be considered a prohibited transaction on the part of the Employer and additional fees and excise taxes will be imposed. There should be company practices in place in order to ensure timely deposits are made.

ERISA Fidelity Bond Coverage

Section 412(a) of the Employee Retirement Income Security Act of 1974 requires that plan fiduciaries of employee benefit plans and every person who handles funds or other property for such plan shall be bonded. The purpose of the bond is to reimburse the plan if any assets are lost or stolen through fraud or dishonesty of the person handling the plan assets. Generally, the amount of the bond shall be no less than 10% of the Plan assets up to a maximum of $500,000. Employer sponsored plans covering only the employer and a spouse are exempt from this bonding requirement.

The Department of Labor requires that any plan, which holds more than 5% of its total plan assets in “non-qualifying” plan assets, must obtain an Independent Qualified Public Account (IQPA) report. An alternative to the IQPA is to increase the amount of the plan’s bond coverage to the greater of 10% of total plan assets or the amount of the “non-qualifying” plan asset.

Participant Notices

  • Safe Harbor Match Notice - This notice should be distributed to all Plan participants at least 30 days prior to the beginning of each plan year or by the entry date(s) for newly eligible plan participants throughout the plan year. This notice is only applicable to 401(k) plans which offer a required Safe Harbor Match contribution by the Employer.
  • Quarterly Pension Benefit Statement - This statement must be provided to each plan participant in an individually directed account plan within 45 days after the end of each calendar year quarter. This notice is only applicable to plans that allow for individually directed brokerage accounts.
  • Multiple Document Notice - This is a one-time notice to Plan participants notifying them of where they may invest their plan assets and who will be providing certain services and when. The notice must be provided to each Plan participant prior to their entry into the Plan and prior to any change in where investments may be invested. This notice is only applicable to plans that allow for individually directed brokerage accounts.
  • Annual Participant Fee Disclosure - This is an annual notice to all Plan participants which discloses certain Plan related and investment related information to participants. This notice is only for plans that allow participants the ability to invest their retirement assets in an individually directed account through a platform provider and/or brokerage account. The goal of this notice is to provide sufficient information to participants in order to help them make informed decisions about their retirement plan. Employees must be provided with the initial disclosure before they can first direct their investments. Any changes to plan or investment related information must be disclosed 30 to 90 days in advance of the change(s) coming into effect.

    This notice must be provided at least once during a 14-month period (regardless of whether the plan operates on a calendar or fiscal year basis).