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11th Circuit Affirms that Unpaid Employer Contributions are Not Plan Assets Absent Clear Plan Language to the Contrary

ERISA?ÇÖs regulations expressly provide that employee contributions withheld from an employee?ÇÖs wages are ?Ç£plan assets?Ç¥ even if the employer never remits the contributions to its employee benefit plan.?á Yet, there is no corresponding provision relating to unpaid employer contributions.?á Courts generally hold that unpaid employer contributions are not plan assets unless clear language in the plan indicates otherwise, such as provisions indicating that employer contributions are plan assets when ?Ç£due?Ç¥ or ?Ç£owing.?Ç¥?á Nevertheless, the employer may still be liable to the benefit plan for the unpaid contributions under contract law depending upon how the plan provision is worded.?á The 11th Circuit recently reaffirmed this proposition in an unpublished case where a participant in the employer?ÇÖs 401(k) plan sued for breach of fiduciary duty because the employer used its employer contribution funds to pay its payroll taxes rather than remitting the funds to the 401(k) plan.?á The court held that there… Continue Reading

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