Even though public K-12 school 403(b) plans are not subject to the Employee Retirement Income Security Act (ERISA), a charter school in New Orleans has been told it has violated federal law by not depositing employees’ 403(b) plan contributions in a timely manner.
The Edgar P. Harney Spirit of Excellence Academy received a Notice of Non-Compliance, Level 2, “because the school has been deemed non-compliant with its contractual obligations regarding financial management as identified in the charter operating agreement,” according to a letter sent to school officials by the Orleans Parish School Board.
The letter identifies dates of employee withholdings from October 15, 2017, through December 31, 2017, that were not transferred to the plan’s recordkeeper until February 19 and 20, 2018.
The letter says the Orleans Parish School Board has received conflicting information about who is responsible for financial management at the school. In addition, the letter notes that there are three separate accounts using a church address, which is in violation of Louisiana state law, which says “a charter school shall not be supported by or affiliate with any religion or religious organization or institution.”
Among other things, the school board has asked the charter school to provide documentation that the affected participants have been notified of the delay of the transfer of contributions and to submit a plan to address any potential investment losses by employees as a result of the late transfer of contributions.