During an audit, the Department of Labor will specifically focus on whether an employer timely deposits elective deferrals and loan repayments. The DOL requires that employers deposit deferrals and loan repayments as soon as administratively feasible after withholding them from an employee’s pay. To correct a late deferral, the DOL requires that the employer also contribute lost earnings that would have been earned had the amounts been timely deposited to the plan. The DOL has an online calculator based on the IRS underpayment rates that employers are permitted to use if they submit a correction application under the DOL’s Voluntary Fiduciary Correction Program. If a plan sponsor does not correct using the VFCP, the DOL can require lost earnings to be calculated using the earnings rate of the investment that had the highest rate or return. If you discover that contributions have not been timely submitted to your 401(k) plan, please contact your Graydon Head attorney to assist you in correcting the error.