Each Monday 401kBasics posts a new tip as a part of our series “Plan Sponsor Quick Tips”. This series is designed to assist plan sponsors in filling their fiduciary role and running their retirement plan efficiently. Your feedback or suggestions on future articles is welcome.
For those who forgot to file their IRS Form 5500 by October 15th, the DOL has a correction program available called the Delinquent Filer Voluntary Compliance (DFVC) Program. Through the DFVC you are able to pay a reduced penalty and bring your plan into compliance. The details are as follows:
- Small and Large Plan Filers are subject to a penalty amount that is $10 per day for each day the annual report is filed after the date on which the annual report was due (without regard to any extensions).
- Small Plan Filers are limited to a maximum penalty amount of $750 for each annual report, not to exceed $1,500 per plan.
- Large Plan Filers are limited to a maximum penalty amount of $2,000 for each annual report, not to exceed $4,000 per plan.
- The penalty amount is to be paid by the plan administrator, not from plan assets.
To assist you with the calculations the DOL has an online calculator available.
It should be noted that the DFVC program does not cover late filing penalties for the IRS and Pension Benefit Guaranty Corporation, however, both agencies have will provide a measure of penalty relief for compliance with the DFVC rules. For more information review the DFVC FAQs.
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