Delinquent Filing (DFVC Program)
The DFVC Program is available prior to the date on which the plan administrator is notified in writing by the DOL of a failure to file a timely annual report.
Although an employer may never get caught, if it does, large penalties can be imposed.
Before you are contacted by the IRS or DOL, penalties can be reduced under the DFVC Program:
- Per filing cap – the maximum penalty for a single late annual report is $750 for small plans and $2,000 for large plans
- Per plan cap – limits the penalty to $1,500 per small plan and $4,000 per large plan for plans that have filled to file for multiple plan years
If during the years of non-filing there is at least one year where the plan is a large plan, for purposes of the applicable amount, the plan is treated as a large plan.
Participation in the DFVC is relatively simple and prohibits the DOL from assessing late filing penalties. In addition, the IRS and PBGC have agreed not to assess a penalty for delinquent Form 5500s where the conditions of the DFVC Program have been satisfied.
See Program update: DOL Fact Sheet
Avoid Costly Penalties:
- Internal Revenue Service (IRS) can impose penalties of $25/day up to a maximum of $15,000
- Department of Labor (DOL) penalties can be much larger with penalties of up to $1,100/day with no maximum
- Willful violations can have a penalty up to a maximum of $25,000; courts can even impose severe criminal penalties and possibly imprisonment
A Few Steps Necessary to Complete a DFVC Filing:
The plan administrator must file a complete Form 5500, including all required schedules and attachments, for each plan year for which the plan administrator is seeking relief. This filing should be sent to the Employee Benefits Security Administration (“EBSA”) at the appropriate address listed in the instructions for the most current Form 5500 or electronically in accordance with the electronic filing requirements.
The plan administrator should submit to the DFVC Program a check for the applicable penalty amount made payable to the “U.S. Department of Labor” and a copy of the Form 5500 without schedules and attachments. In the event that the plan administrator files using a 1998 or prior plan year form, a copy of only the first page of the Form 5500 or Form 5500-C, as applicable, should be submitted.
A separate submission to the DFVC Program (including a separate check for the applicable penalty amount) must be made for each plan.