Last week, the DOL published a comprehensive update to its Delinquent Filer Voluntary Correction (“DFVC”) Program in the Federal Register.  A little background:

  • The Secretary of Labor has the authority to asses civil penalties of up to $1,100 against a plan administrator who fails or refuses to file a complete and timely Form 5500 (plan annual return/report);
  • The DOL first adopted the DFVC program in 1995 to encourage plan administrators to voluntarily correct late Forms 5500 by offering the opportunity to file and pay a reduced penalty (which was capped on a per year and per plan basis); and
  • The DVFC was last updated in the Federal Register in 2002; however, the Program has been updated periodically since 2002 to reflect the adoption of certain technical changes (including changes associated with electronic filing of Forms 5500 and allowing for online payment of the DFVC penalty).

Below is a summary of the main updates set forth in the Federal Register’s comprehensive update.  Note that some of these changes were previously adopted informally on the DOL’s website and are now being incorporated into the Federal Register description of the program, while others are new:

  • Paper filings are no longer accepted for either timely or delinquent filings (since the migration to the EFAST2 electronic filing system is complete for all filing years);
  • DFVC filers generally must use the most current year EFAST2 form and schedules available for filing in EFAST2 (entering the correct plan year dates on the space provided at the beginning of the Form 5500) with the following exceptions:
    • Filers must attach as a pdf image file the correct year Schedules B, SB, MB, E, P, R, and T, as applicable, for delinquent filings for plan years that commenced prior to January 1, 2009, completed with blue or black ink;
    • Filers required to file Schedule C for the plan year for which the delinquent filing is being made have the option of attaching a pdf image of the correct year Schedule C completed with blue or black ink in accordance with the correct year instructions, instead of filing the latest plan year Schedule C available; and
    • Filers filing for Code section 403(b) plans for plan years commencing before January 1, 2009 must use the latest plan year Form 5500 available, but must complete only those limited reporting items required to be completed before 2009 (i.e., Part I and Part II, lines 1-4, and line 8);
  • The DOL added an online tool to its website (called the “Form 5500 Version Selection Tool”), designed to assist filers in determining which versions of Forms 5500/5500-SF and schedules to use when filing delinquent annual reports or amending prior year annual reports under EFAST2;
  • The DOL issued a reminder that filers cannot submit the Schedule SSA (“Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits”) or IRS Form 8955-SSA (in pdf format or otherwise) to EFAST2 or under the DFVC Program.  This information must be submitted directly to the IRS; and
  • Filers who utilize the online payment system are no longer required to mail a hard copy of the Form 5500 (without schedules) to another DVFC address.

Note the applicable DFVC Program penalties have not changed.  Thus, to use the Program, a plan administrator must pay $10 per day for each day the Form 5500 is filed after its due date (without regard to any extensions), subject to the following caps:

Click here to view table.

For this purpose, a “small plan” is one with fewer than 100 participants at the beginning of the plan year and a “large plan” is one with at least 100 participants at the beginning of the plan year.  The “per plan” cap applies in the case of a DFVC Program submission relating to more than one delinquent annual report for the plan.