When does accrued pension contributions be come due
I pay semi-monthly so that the check for the second pay period in each month is disbursed during the first week of the following month. I am also required by the term of a CBA to contribute accrued pension contribution (from each hour of earned wages) by the 20th day for the month following accrual (DFMA). Am I correct that the pension contribution for the 2nd pay period payroll disbursements is not due until the 20th day after the 2nd pay period payroll checks are disbursed?
Jan. has two pay periods:
1st - 15th pay day - Jan. 22nd -20th DFMA - Feb 20th
16th - 31st pay day - Feb 8th -20th DFMA - Mar. 20th
And, isn't there written accounting rules somewhere that clearly state that benefit contributions accrue when the employee is paid wages earned, or something to that effect.?
I'm no pension expert, but I do know about accrual accounting.
The principle of accrual accounting means to recognize income when earned (not when received) and to recognize an expense when incurred (not when paid).
It sounds like your CBA indicates that you should pay contributions on the 20th day after the funds are accrued.
I think you should contact the administrator of your pension plan. They will know the rules of your pension plan and can tell you when the payments need to be made.
Every plan is different.
Hope that helps!