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Compliance August 10, 2002
Feds Team Up To Track Late 5500 Filers
October 8, 2002 (PLANSPONSOR.com) - The federal
government is making a list - and checking it twice - and
then some - to make sure that plan sponsors are fulfilling
their annual reporting requirements.
Reported by Nevin E. Adams
The US Department of Labor’s Pension and Welfare Benefits Administration (PWBA) and Internal Revenue Service (IRS) have announced a joint project to ensure that all employee benefit plans have complied with their annual return/report (Form 5500) filing obligations under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code.
Under the project, the agencies are conducting research of various databases to identify potential non-filers. Beginning this December the agencies will mail letters of inquiry to those identified as potential non-filers.
Penalty Phase
Failure to do so, of course, may result in significant monetary penalties. ERISA requires most private-sector plans to file the Form 5500 annually. Plan administrators who fail or refuse to comply with ERISA’s requirement may face civil penalties of up to $1,100 per day for each report. Likewise, the IRS may assess penalties of $25 per day (up to $15,000) for failure to timely file returns for certain pension and profit sharing plans, according to the PWBA.
The agencies, however, also took advantage of an opportunity to remind delinquent filers of a program currently available to assist plan administrators in filing delinquent reports. While not exactly new, the Delinquent Filer Voluntary Compliance Program (established in April 1995) has been updated to substantially reduce the penalties, thus making it more likely that plan administrators will take advantage of the window. In addition, the IRS said that it will not assess penalties on delinquent filers who satisfy the requirements of the DFVC Program.
Plan administrators who have already been notified by PWBA about a delinquent filing are not eligible to participate in the program.
For more information about the project, you may contact PWBA at (202) 693-8360 (this is not a toll-free number) or the IRS customer service number at 1-877-829-5500.
Information about the DFVC Program is available from PWBA on its website at www.dol.gov/pwba or by calling the number above. Questions about the Form 5500 should be directed to PWBA’s toll-free number at 1-866-463-3278.