On Monday, January 28, 2013, the U.S. Department of Labor ("DOL") announced technical updates to its Delinquent Filer Voluntary Compliance Program ("DFVCP"). The DFVCP program was established in 1995 and was later expanded and updated in 2002. Under ERISA, most employers are required to file a Form 5500 report on an annual basis for their welfare and retirement plans. If an employer fails to file, refuses to file or files an incomplete Form 5500 annual reports, it is subject to significant civil penalties.
The following penalties may be assessed by the DOL:
In contrast, if an employer voluntarily files all past due Form 5500 annual reports under the DFVCP program, the employer benefits from significantly reduced civil penalties.
If an employer has already received a written notification from the DOL of its failure to file one or more Form 5500 annual reports, it is not eligible to participate in the DFVCP program. However, a late-filer notice from the IRS will not disqualify a plan from participating in the DFVCP program.
Because of the reduced penalties under the DFVCP, we encourage all companies to review their filing status and ensure that compliance. Often, due to a change in H.R. professionals or a shift in responsibilities, a Form 5500 annual report is overlooked and not filed. Please be sure to contact your relationship attorney with any questions.
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