DOL Technical Release 92-01: Deposit Timing and Trust Relief

Department of Labor Technical Release 92-01 is 1992 guidance that told employers running contributory welfare benefit plans two things: when participant contributions must reach the plan trust, and when the plan can skip the trust requirement altogether. It set a 90-day outer deadline for depositing withheld employee money into welfare plans like cafeteria plans and group health arrangements, kept the underlying standard tied to the earliest date the funds could reasonably be segregated from the employer’s assets, and announced interim enforcement relief so that cafeteria plans would not be pursued solely for failing to hold participant contributions in trust. That “interim” relief has never been replaced, which is why plan sponsors still work from TR 92-01 more than three decades later.¹

The Deposit Timing Standard

TR 92-01 replaced earlier 1988 guidance (TR 88-01) that had left too many questions open about cafeteria plans, and announced a revised enforcement policy covering cafeteria plans and other contributory welfare arrangements.¹ The timing framework has two layers, and both matter.

The primary rule is that participant contributions must be deposited into the plan trust on the earliest date they can reasonably be segregated from the employer’s general assets. This is the standard now codified in 29 CFR 2510.3-102, which treats withheld amounts as plan assets from the moment segregation becomes feasible.² If your payroll system can cut a separate check or wire to the trust in two or three days, that is your deadline.

The second layer is the outer boundary. For welfare benefit plans, the deposit can never occur later than 90 days after the employer received or withheld the money.² Ninety days is a ceiling, not a grace period. An employer that could reasonably deposit in five days but waits sixty is late, even though it comes in well under 90.

Trust Relief for Cafeteria Plans

ERISA Section 403 requires all plan assets to be held in trust by one or more trustees.³ Applied literally, that meant a small group health plan funded partly by employee payroll deductions needed a formal trust, and larger plans needed an independent audit on top of it. For plans that simply forwarded premiums to an insurance carrier, the cost of that structure was hard to justify.

TR 92-01 addressed the problem by announcing that the DOL would not pursue enforcement against a cafeteria plan described under Section 125 of the Internal Revenue Code solely because it failed to hold participant contributions in a trust. The Department framed the policy as interim relief while it considered whether to issue permanent regulatory exemptions.¹ Those permanent rules never came, and this is the enforcement position cafeteria plan sponsors continue to rely on.

Reporting and Audit Exemptions

TR 92-01 also clarified how welfare plans could qualify for the reporting and audit exemptions under 29 CFR 2520.104-20 and 2520.104-44. The relief works differently by plan size:

Plans with fewer than 100 participants are exempt from filing a Form 5500 annual report if benefits are paid solely from the employer’s general assets, or provided exclusively through insurance contracts or a qualified HMO with participant contributions forwarded to the carrier within three months of receipt.
Plans with 100 or more participants are exempt from engaging an independent auditor under the same conditions.

Neither exemption is available to a welfare plan that holds participant contributions in a trust or uses participant contributions to pay benefits directly rather than forwarding them as insurance premiums. The DOL’s reasoning was that once participant money is used to pay claims instead of premiums, the funds are clearly separable from the employer’s assets and need the protections that come with trust status and independent oversight.¹

Is TR 92-01 Still in Effect?

Yes. TR 92-01 was labeled interim relief in 1992, and it has now been in place for more than three decades. The DOL has not withdrawn, superseded, or replaced it, and it remains published on the agency’s technical releases page.¹ For cafeteria plan trust enforcement and the welfare plan reporting exemptions it interpreted, TR 92-01 is the operative policy today.

How TR 92-01 Fits With Today’s Deposit Rules

The 90-day outer limit still applies to welfare plans. For retirement plans, though, the deadlines are shorter. 29 CFR 2510.3-102 now sets separate timing rules for pension benefit plans, and welfare-plan sponsors should not read across to conclude that a 401(k) has the same cushion.

For pension plans, the outer limit is the 15th business day of the month following the month contributions were withheld or received. If deferrals come out of a March 15 paycheck, the absolute deposit deadline is the 15th business day of April.² The earliest-reasonable-date standard still runs underneath that ceiling.⁴ Employers maintaining a SIMPLE plan with SIMPLE IRAs work from a different outer deadline: the 30th calendar day following the month the contributions would otherwise have been payable to the participant.⁵

Small pension plans get a compliance tool welfare plans do not have. Plans with fewer than 100 participants at the start of the plan year can rely on a safe harbor that deems contributions timely if deposited by the seventh business day after withholding. Meeting that deadline creates a presumption that the employer satisfied the earliest-reasonable-date standard.⁵ A deposit on the eighth business day is not automatically late; the employer just loses the safe harbor and has to show the deposit happened as soon as reasonably possible.

What Happens If a Deposit Is Late

Once withheld amounts become plan assets, they stop belonging to the employer. Holding them past the point they could reasonably have been segregated is treated as an unauthorized loan from the plan to the employer, which is a prohibited transaction under ERISA Section 406 and Internal Revenue Code Section 4975.⁶ Field Assistance Bulletin 2008-01 confirmed that reading.⁷

The IRS imposes an initial excise tax of 15% of the amount involved for each year (or partial year) the prohibited transaction remains uncorrected, and a 100% tax applies if the problem is still uncorrected by the end of the taxable period.⁸ The “amount involved” is the greater of the money given or received in the transaction, which for a late deposit typically means the full principal of the late contribution, not just lost investment earnings. Employers report and pay the tax on Form 5330.⁹

Separately, the employer has to make participants whole by restoring lost earnings. The DOL publishes an online calculator that computes lost earnings using IRS underpayment interest rates.¹⁰

The Voluntary Fiduciary Correction Program gives employers a route to fix late deposits, avoid a DOL enforcement action, and potentially eliminate the excise tax under Prohibited Transaction Exemption 2002-51.¹¹ A Self-Correction Component lets sponsors handle small, routine delinquent contributions without filing a full VFCP application, with the same excise tax relief available on receipt of the DOL’s email acknowledgment.¹² Whichever route the employer takes, the correction itself still requires depositing the late contributions plus lost earnings; the tax relief does not eliminate the duty to make participants whole.

1
U.S. Department of Labor. Technical Release 1992-01 – DOL Enforcement Policy for Welfare Plans with Participant Contributions
2
eCFR. 29 CFR 2510.3-102 – Participant Contributions
3
Office of the Law Revision Counsel. 29 US Code 1103 – Establishment of Trust
4
U.S. Department of Labor. ERISA Fiduciary Advisor
5
eCFR. 29 CFR 2510.3-102 – Definition of Plan Assets – Participant Contributions
6
Office of the Law Revision Counsel. 29 US Code 1106 – Prohibited Transactions
7
U.S. Department of Labor. Field Assistance Bulletin No. 2008-01
8
Office of the Law Revision Counsel. 26 US Code 4975 – Tax on Prohibited Transactions
9
Internal Revenue Service. Form 5330 Corner
10
U.S. Department of Labor. Voluntary Fiduciary Correction Program (VFCP) Online Calculator
11
U.S. Department of Labor. Voluntary Fiduciary Correction Program
12
U.S. Department of Labor. Voluntary Fiduciary Correction Program Fact Sheet