EBSA Press Release: Labor Department Extends Grace Period for Employers to Pay Back Extensions [08/02/1996]

For more information call: (202) 219-8921
 

The U.S. Department of Labor is expanding the grace period of its Pension Payback Program which allows employers to voluntarily restore money they deducted from workers' paychecks but had not deposited in their 401(k) plans.

The expanded grace period will include employers who voluntarily restore delinquent participant contributions plus interest between Nov. 28, 1995 and Sept. 7, 1996 and who, if they meet all of the conditions of the program, can avoid any civil and criminal penalties.

The original pension payback program, announced March 7, gave qualified employers a six-month grace period from March 7 to Sept. 7, 1996, to deposit, with interest, participant contributions which they failed to deposit in 401(k) plans. The program is not available to any employers currently under investigation by the department.

The grace period was expanded at the request of employers who voluntarily restored unpaid participant contributions to their 401(k) accounts. Since November 1995, more than 1000 investigations have been opened involving 401(k) contributions. So far, $10.01 million has been recovered for workers.

Both the final class exemption and notice adopting the amended program are scheduled to be published today in the Federal Register. They also clarify the methods for calculating the earnings owed on delinquent contributions.

More specific information concerning program eligibility requirements and the notification process for participation may be obtained by calling 202-219-4377 or writing the Pension Payback Program, Pension and Welfare Benefits Administration, U.S. Department of Labor, P.O. Box 77235, Washington, D.C. 20013-7235.