The Department of Labor (DOL) is statutorily authorized to assess civil penalties of up to $1,100 per day against plan administrators who fail to file complete and timely Form 5500s (Annual Return/Report of Employee Benefit Plan). Pursuant to this authority, the DOL maintains an enforcement program under which plan administrators who fail to file a Form 5500 may be assessed a penalty of up to $300 per day, up to $30,000 per year, until a complete Form 5500 is filed. Plan administrators who file a late Form 5500 may be assessed up to $50 per day for each day the Form 5500 is filed after the date on which it was required to be filed, without regard to any extensions of time for filing.
Designed to encourage voluntary compliance by plan administrators, the DOL has maintained a Delinquent Filer Voluntary Compliance Program (DFVCP) since 1995 that allows plan administrators to file delinquent annual returns while potentially incurring substantially reduced penalties. The DFVCP was amended in 2002 and has now been amended again. The latest changes are effective January 29, 2013.
Prior to the requirement that all Forms 5500 be filed electronically through the DOL’s EFAST2 filing system, delinquent filers had the option of submitting a late Form 5500 using the current year’s forms or the correct prior year’s forms. Now that all Form 5500s are required to be filed through the EFAST2 system, delinquent filers may be required to use the current year Form 5500 while attaching prior year schedules for the relevant plan year. To aid delinquent filers in determining which forms and schedules must be submitted, the DOL has added an online tool that helps identify the proper Form 5500 and schedules. The updates to the DFVCP also incorporate the already-existing DFVCP penalty calculator and online payment option available through the DOL’s website. Plan administrators participating in the DFVCP retain the option to mail the applicable penalty amount with a copy of the filed Form 5500(s) (without schedules or attachments).
The DFVCP penalty structure remains the same under the updated DFVCP.
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