THE DELINQUENT FILER VOLUNTARY COMPLIANCE PROGRAM
The Delinquent Filer Voluntary Compliance Program (DFVCP) is designed to encourage voluntary compliance with the annual reporting requirements under Employee Retirement Income Security Act (ERISA). The DFVCP gives delinquent plan administrators a way to avoid potentially higher civil penalty assessments by satisfying the program’s requirements and voluntarily paying a reduced penalty amount.
Who is Eligible
Eligibility for the DFVCP is limited to plan administrators with Form 5500 filing obligations who comply with the provisions of the program and who have not been notified in writing by the DOL of a failure to file a timely Form 5500 annual report.
Participation in the DFVCP is a two-part process. First, the plan administrator must file a complete Form 5500 Series Annual Return/Report, including all schedules and attachments, with the Employee Benefits Security Administration (EBSA) for each year for which relief is requested. To ensure proper processing, box “D” on the 5500 must be marked and a statement labeled “DFVCP” must be attached. Second, the plan administrator must submit a copy of the 5500, without the schedules and attachments and with the applicable penalty amount, to the DFVCP. The plan administrator is personally liable for the applicable penalty amount, and, therefore, amounts paid under the DFVCP cannot be paid from the assets of an employee benefit plan.
“Per day” penalty – The basic penalty under the program is $10 per day for delinquent filings.
“Per filing” cap – The maximum penalty for a single late Form 5500 annual report is $2,000 for a large plan (100 or more participants on the 1st day of the plan year).
“Per plan” cap – The DFVCP also includes a “per plan” cap. This cap is designed to encourage reporting compliance by plan administrators who have failed to file a Form 5500 annual report for a plan for multiple years. The “per plan” cap limits the penalty to $4,000 regardless of the number of late Form 5500 annual reports filed for the plan at the same time. There is no “per administrator” or “per sponsor” cap. If the same person is the plan administrator or plan sponsor of several plans required to file Form 5500 annual reports, the maximum applicable penalty amounts would apply for each plan.
Caution – A plan sponsor that adopts a “wrap” or “mega-wrap” plan retroactively, in order to decrease late Form 5500 filing penalties that would otherwise apply, should proceed with caution. Changing employer sponsored plans should generally be done on a prospective basis only.
Program Participation Procedures
The procedures governing participation in the DFVCP program are intended to make the program easy to use:
- Plan administrators may use the Form 5500 for the year relief is sought or the most current form available at the time of participation. This option allows administrators to choose the form that is most efficient and least burdensome for their circumstances;
- Box D of the Form 5500 must be checked and a statement labeled “DFVCP” must be attached;
- The program conforms to the annual reporting procedures under the computerized ERISA Filing Acceptance System (EFAST); and
An online calculator is available to assist filers in computing the penalty. Additionally, after completing the calculator, located at www.efast.dol.gov, filers may choose to file electronically. However, if filing through the mail is preferred, the FAQs, located at the same site, provide the addresses and detailed information.
Contacts for Additional Information
Questions about the DFVCP should be directed to EBSA by calling 202.693.8360 or www.dol.gov/ebsa. For additional information about the Form 5500 Series, visit the EFAST Internet site at www.efast.dol.gov, or call the EBSA help desk at 1.866.463.3278.