On May 9, 2014 the IRS issued two new pieces of guidance (Revenue Procedure 2014-32 and Notice 2014-35) providing penalty relief for certain late filers of Form 5500. Generally, plan administrators who fail to timely file Form 5500 series annual reports can be subject to penalties under both Title I of the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (Code). The plan sponsor or administrator can face late filing penalties for delinquent Forms 5500 and Forms 5500-EZ as high as $15,000 for each late return, plus interest.

Non-Title I Retirement Plans (One-Participant Plans and Certain Foreign Plans)

In Revenue Procedure 2014-32, the IRS has established a temporary one-year pilot program providing relief from Form 5500 series annual reports late filing penalties to plan administrators and plan sponsors of retirement plans that are: (1) small business (owner- spouse) plans and plans of business partnerships (together, "one-participant plans") that do not provide benefits for anyone except the owner and/or the owner's spouse or one or more partners; and (2) certain foreign plans not subject to Title of 1 of ERISA. To qualify for the relief, certain procedural requirements must be met, including the filing of the late return, including all required schedules and attachments, for each plan year that the applicant is seeking penalty relief. No penalty or other payment is required to be paid under this pilot program. The temporary pilot relief program is effective June 2, 2014 and will remain in effect until June 2, 2015.

Later Filers Participating in the DOL's Delinquent Filer Voluntary Compliance Program

Since 2002, the Internal Revenue Service (IRS) has not imposed penalties relating to the filing of a Form 5500 series report on a plan administrator or sponsor who satisfies the requirements of the Department of Labor's (DOL) Delinquent Filer Voluntary Compliance (DFVC Program) with respect to the filing of a Form 5500. The DFVC Program allows plan administrators who fail to file a timely annual report to pay reduced civil penalties otherwise applicable under Title I of ERISA.

In Notice 2014-35, the IRS has modified the requirements for retirement plans to qualify for IRS late filing penalty relief to reflect that the Annual Registration Statement for Deferred Vested Participants (Schedule SSA) was replaced by Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits, a stand-alone form that must be filed with the IRS, but not the DOL. The IRS will now waive the late filing penalties only for filers who: (1) are eligible for and satisfy the requirements of the DFVC Program with respect to a delinquent Form 5500 series return for such year; and (2) file separately with the IRS a Form 8955-SSA with any information required to be filed for the year to which the DFVC filing relates (to the extent that the information has not previously been provided to the IRS). The Form 8955-SSA must be filed on paper with the IRS and must be filed by the later of 30 calendar days after the filer completes the DFVC filing or December 1, 2014. This requirement applies with respect to any DFVC filing submitted through EFAST2 (generally, all DFVC filings after December 31, 2009), regardless of whether the filing was submitted before the issuance of Notice 2014-35.