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FORM 5500 PENALTIES CAN BREAK YOUR BUDGET, LATE FILINGAlthough the Form 5500 is only an information return, under the provisions of Employee Retirement Income Securities Act (ERISA) a plan administrator who does not file or refuses to file for an employee benefit plan may be assessed a penalty of up to $1,100 per day.

A return/report must be filed annually for every pension benefit plan, large welfare benefit plan, and for every entity that files as a Direct Filing Entity. If you are a small plan you may be eligible to file the Form 5500-SF instead of the Form 5500 or may qualify to be exempt from filings.

The following penalties may be assessed against plan administrators by the Department of Labor (DOL):

  • Late Filers – Plan administrators filing a late annual report may be assessed $50 per day, with no limit, for the period they failed to file to file, determined without regard to any extensions for filing.
  • Non-Filers – Plan administrators who fail to file an annual report may be assessed a penalty of $300 per day, up to $30,000 per year, until a complete annual report is filed.

In addition, the Internal Revenue Service (IRS) may assess $25 per day up to $15,000 per year.

The DOL’s Delinquent Filers Voluntary Compliance Program (DFVCP) facilitates voluntary compliance by plan administrators who are delinquent in filing annual reports under Title I of ERISA by permitting administrators to pay reduced civil penalties for voluntarily complying with their DOL annual reporting obligations. The IRS may also accept these filings.

The following reduced penalties should be voluntarily paid under the DFVC Program:

  • Small Plan Filers – for a plan with fewer than 100 participants at the beginning of the plan year, the applicable penalty is $10 per day for each day the annual report is filed after the date on which the report was due (without regard to any extension), not to exceed $750. If more than one delinquent report is filed for the same plan the maximum penalty amount is $750 for each annual report, not to exceed $1,500 per plan.
  • Large Plan Filers – for a plan with greater than 100 participants at the beginning of the plan year, the applicable penalty is $10 per day for each day the annual report is filed after the date on which the report was due (without regard to any extension), not to exceed $2,000. If more than one delinquent report is filed for the same plan the maximum penalty amount is $2,000 for each annual report, not to exceed $4,000 per plan.

Contact 5500Tax Group today for assistance with filing delinquent Forms 5500 under the Department of Labor’s Delinquent Filers Voluntary Compliance Program (DFVCP.)