Defined Contribution Plan - Employer Match Remittance to Plan Trustee
Recording the actual cash remittance of accrued employer matching contributions to the 401(k) plan trust, clearing the payable established at accrual.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Accrued 401(k) Employer Match Payable (Cleared) | Liability (-) | 3,850,000.00 | - |
| Cash & Cash Equivalents | Asset (-) | - | 3,850,000.00 |
💡 Accountant's Note
DOL regulations require employer contributions to be deposited to the plan trust 'as soon as reasonably possible' after they can be segregated from company assets — practically, within 7 business days for plans with fewer than 100 participants, and as quickly as 3-5 business days for large plans based on the small plan safe harbor. Late deposits are a PROHIBITED TRANSACTION under ERISA — the employer must correct by calculating and paying the lost earnings (typically using the DOL Online Calculator) and reporting on Form 5500. Late deposits are one of the most common ERISA violations and a primary focus of DOL enforcement.
Practitioner & Systems Framework
💻 ERP Architecture
Establish an automatic payment workflow triggered by each payroll cycle. Map the payroll deposit date to the plan contribution date in the plan records — the 'earliest date on which the amounts can reasonably be segregated from company assets' begins the clock. Wire transfers should include the specific payroll period the contribution relates to for proper allocation in the plan recordkeeping system.
⚠️ Audit Flags
Plan auditors (for Form 5500 large plan filers) specifically test for timely deposit of both employee deferrals AND employer contributions. The test dates against the payroll date to identify late deposits. Even 1-day delays are technically prohibited transactions that require correction. Companies with consistently late deposits receive a qualified plan audit opinion. IRS and DOL can impose excise taxes (15% of prohibited transaction amount) on late deposits.
📄 Required Documentation
Payroll records showing employee deferral withholding dates, bank wire transfer records showing deposit dates, plan trustee/recordkeeper statements confirming receipt by date, DOL deposit timeliness testing workpaper, correction documentation for any late deposits (DOL Voluntary Correction Program or prohibited transaction exemption).
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