Timely Enrollment in the Retirement Plan
Eligibility in the Retirement Plan depends on:
1. Y service: Employees must complete 1,000 hours of service during each of any two 12-month periods, beginning with their date of hire or anniversary date. The two years do not have to be consecutive.
2. Age: Once employees complete the service requirement, they must be enrolled on the first day of the month following their anniversary date, provided they are 21 years of age. If the anniversary date falls on the first of the month, they are enrolled on their anniversary date.
Once a Y employee is eligible, participation in the Retirement Plan is mandatory.
Failure to Comply: The YMCA must make 100% restorative contributions for all affected employees for all Plan years, plus accrued interest.
Participant contributions to the Retirement Plan as of the earliest date on which the funds can be segregated—no later than the 15th business day following the month when payable
Employer contributions to the Retirement Plan no later than the 15th business day following the month to which they relate
Participant contributions to the Savings Plan no later than the 15th business day following the month when payable
Failure to Comply: The YMCA must pay a 15% (or additional 100% if not timely corrected) excise tax on late participant contributions. The YMCA must pay a 10% (or additional 100% if not timely corrected) excise tax on late employer contributions.
Universal Availability of the Savings Plan
Failure to Comply: Disqualify the advantageous tax deferral for plan participants in the savings plan. The YMCA must pay (i) up to 50% of employees’elective deferral if it fails to implement employees’instructions or (ii) 50% of the average contributions if it fails to offer the savings plan.
Overall Primary Risk
In addition to the specific penalties applicable to a delinquent YMCA identified above under “Failure to Comply”, noncompliance with these obligations by a single YMCA could constitute a breach of fiduciary duty under ERISA. Such a breach could result in the retirement plan losing its favorable tax status for all YMCAs participating in the Plans; and/or the suspension or termination of the delinquent YMCA from participating in the YMCA Retirement Fund.