Missing the final deadline for filing your Form 5500 is a common pitfall for plan administrators. The filing due date for a Form 5500 is seven months after the end of the plan year with an optional 2 ½ month extension, allowing 9 ½ months to file the final Form 5500. Miss that deadline and you are subject to some pretty stiff penalties. Now that filings are submitted electronically to the Department of Labor, they know immediately if you failed to meet your filing deadline and they’ll be quick to remind you! Unfortunately, missing the deadline is expensive; as much as $1,000 per day with a maximum of $15,000. Ouch!
The solution to filing a delinquent Form 5500 with reduced penalties is the Delinquent Filer Voluntary Compliance Program (DFVCP). This program was created by the Department of Labor to encourage plan administrators to file overdue Form 5500s. Plan administrators are eligible to pay reduced civil penalties under the program if the required filings under the DFVCP are made prior to the date on which the administrator is notified in writing by the Department of Labor. The process is fairly simple: electronically file the late Form 5500, and just check the box labeled “DFVC program” located in Part I, Line D of the Form 5500.
For Large Plan Filers (more than 100 participants at the beginning of the plan year), the penalties are reduced from up to $1,000 per day to $10 per day, not to exceed $2,000.
For Small Plan Filers (less than 100 participants at the beginning of the plan year), the penalties are also reduced to $10 per day, not to exceed $750.
For more information about getting your pension plan into compliance call LSL CPAs at 714.569.1000.
By Michael Rossi, CPA
For over 30 years, Maria has served clients in a variety of areas including financial statement audits, reviews and compilations as well as business and individual taxation. Maria excels working with clients in the real estate, and healthcare industries, along with employee benefit plans.
You can reach Maria at 714-569-1000