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In an effort to encourage pension and welfare plan administrators to
file overdue annual reports (commonly referred to as the Form 5500), the
Department of Labor’s Employee Benefits Security Administration (EBSA)
is providing plan administrators with the opportunity to pay reduced civil
penalties for voluntarily complying with the annual reporting
requirements.
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 a failure to file a timely annual report under Title I of the Employee
Retirement Security Act of 1974 (ERISA).
Participation in the DFVCP is a two part process:
First – file a complete Form 5500 Annual Return/Report, including all
schedules and attachments, for each year the plan administrator is
requesting relief.
Mark Box D – “If filing under an extension of time or the DFVCP,
check box and attach required information” and attach a statement that
the report is being submitted under the DFVCP with “Form 5500, BOX D-
DFVCP Filing” prominently displayed at the top of the statement.
This filing should be sent to EBSA at the appropriate ERISA Filing
Acceptance System (EFAST) address listed in the instructions for the most
current Form 5500 Annual Return/Report, or electronically in accordance
with the EFAST electronic filing requirements. The current EFAST addresses
follow:
Address for filing on paper by Mail:
Employee Benefits Security Administration
P.O. Box 7043
Lawrence, Kansas 66044-7043
Address for filing on floppy disc, CD-Rom or Tape:
Employee Benefits Security Administration
P.O. Box 7041
Lawrence, Kansas 66044-7041
By Private Delivery Service:
Employee Benefits Security Administration/NCS
Attn: EFAST
3833 Greenway Drive
Lawrence, Kansas 66046-1290
Second – submit the payment and filing information to the
DFVCP. You can submit your payment by check and paper using mail or
private delivery service or you can submit it electronically using the
web-based payment system that appears at the end of the DFVCP penalty
calculator.
By Paper – submit a copy of the completed Form 5500, without
schedules or attachments, and a penalty check for the applicable penalty
amount (described below), made to the Department of Labor to:
By Mail:
DFVCP
P.O. Box 70933
Charlotte, NC 28272-0933
By Private Delivery Service:
DFVCP
QLP Wholesale Lockbox - NC0810
Lockbox #70933
1525 West WT Harris Blvd
Charlotte, NC 28262
It is recommended that all filings for a plan be submitted to the DFVCP
in the same envelope or package in order to ensure that those filings
count towards the per-plan capped penalty amount described below.
Electronically – After completing the DFVCP calculator at
www.efast.dol.gov
instructions are provided that will prompt you how to enter the required
information to pay electronically.
Small Plan Filers - Small Plan Filers - In the case of a plan with
fewer than 100 participants at the beginning of the plan year (hereinafter
small plan), the applicable penalty amount is $10 per day for each day the
annual report is filed after the date on which the annual report was due
(without regard to any extensions), not to exceed $750. In the case of a
DFVCP submission relating to more than one delinquent annual report filing
for the same plan, the maximum penalty amount is $750 for each annual
report, not to exceed $1,500 per plan.
Note: The 80/120 participant rule described in 29 § CFR 2520.103-1(d)
is applicable in determining whether a plan is a small or large plan.
Large Plan Filers - Large Plan Filers - In the case of a plan with 100
or more participants at the beginning of the plan year and which is not
eligible for the 80/120 participant rule (hereinafter large plan), the
applicable penalty amount is $10 per day for each day the annual report is
filed after the date on which the annual report was due (without regard to
any extensions), not to exceed $2,000. In the case of a DFVCP submission
relating to more than one delinquent filing for the same plan, the maximum
penalty amount is $2,000 for each annual report, not to exceed $4,000 per
plan.
It is recommended that all filings for a plan be submitted to the DFVCP
in the same envelope or package in order to ensure that those filings
count towards the per-plan capped penalty amount.
Example 1 - An administrator of a large plan with a calendar year plan
year files the annual report for the 2004 plan year on August 6, 2005. The
administrator failed to properly extend the filing due date of July 31,
2005. Under the DFVCP, the applicable penalty amount would be $60 (6 days
x $10).
Example 2 - Assume the same facts as in Example 1, except that the
filer filed the annual report on March 31, 2006. Under the DFVCP, the
applicable penalty amount is $2,000 (though the penalty amount calculated
at $10 per day would be $2,430 for 243 days, the per-filing cap of $2,000
applies).
Example 3 - Assume the same facts as in Example 2, except that the
filer filed annual reports for the same plan for the 2001, 2002, and 2003
plan years on March 31, 2005. Under the DFVCP, the applicable penalty
amount is $4,000, which is the per-plan filing cap for large plans.
Example 4 - Assume the same facts as in Example 3, except that the
filer is also submitting an additional plan year 2004 filing under the
DFVCP for another plan. Under the DFVCP, the penalty amount is $6,000
($4,000 applicable to the three filings discussed in Example 3, plus
$2,000 for the Form 5500 filed for the other plan).
There is now an online DFVCP penalty calculator
available to
help you easily and accurately compute the amount you owe to participate
in the program. We encourage you to use this calculator so you can avoid
any errors that could delay your participation on the program.
The penalty check should be made payable to the Department of Labor.
No. The relief under the DFVCP is available only to the extent that a
Form 5500 is required to be filed under Title I of ERISA. For example,
Form 5500-EZ filers and Form 5500 filers for plans without employees (as
described in 29 CFR § 2510.3-3(b) and (c)) are not eligible to
participate in the DFVCP because such plans are not subject to Title I of
ERISA. Plan administrators may call 202.693.8360 if they have questions
about whether the program applies to their filings.
The plan administrator shall file either:
The most current Form 5500 Annual Return/Report form issued (and
indicate in the appropriate space on the first page of the Form 5500 the
plan year for which the annual return/report is being filed if different
from the most current Form 5500), or
The Form 5500 Series Annual Return/Report form issued for the plan year
for which the relief is sought (but not a Form 5500-R if the filing is for
a 1998 plan year or a prior year).
The following penalties may be assessed against plan administrators:
Late Filers - Plan administrators filing a late annual report (i.e.,
after the date the report was required to be filed, including extensions)
may be assessed $50 per day, with no limit, for the period they failed 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.
If, during the years of non-filing, there is at least one year where
the plan is a large plan, for purposes of the DFVCP the plan must use the
large plan penalty amounts of $10 per day up to a maximum of $2,000 per
filing, not to exceed $4,000 per plan.
Yes. In the case of a small plan sponsored by a Code section 501(c)(3)
organization (including a Code section 403(b) small plan), the applicable
penalty amount is $10 per day for each day the annual report is filed
after the date on which the annual report was due (without regard to any
extensions), not to exceed $750 regardless of the number of delinquent
annual reports for the plan submitted as part of the same DFVCP
submission.
This per-plan penalty cap, however, will not be available if, as of the
date the plan files under the DFVCP, there is a delinquent or late annual
report due for a plan year during which the plan was a large plan.
Small plan filings that are eligible for this special per-plan penalty
cap must bear the notation 501(c)(3) Plan in the upper-right corner of the
first page of the Form 5500 that is submitted to the DFVCP in Charlotte,
North Carolina. This notation should not be included in the filing made
with EBSA in Lawrence, Kansas.
If submitting to the DFVCP electronically, follow the calculator
instructions for online payment at www.efast.dol.gov.
No. All penalties under the DFVCP are calculated at $10 per day,
beginning on the day after the date the filing was due, without regard to
any extensions.
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 of a failure to file a timely annual report under Title I of the
Employee Retirement Security Act of 1974 (ERISA).
IRS late-filer penalty letters will not disqualify a plan from
participating in the DFVCP.
A Department of Labor Notice of Intent to Assess a Penalty will always
disqualify a plan.
Yes. Payment of the penalty amount under the terms of the DFVCP
constitutes, with regard to the filings submitted under the Program, a
waiver of the right both to receive notice of the assessment from the
Department and to contest the Department’s assessment of the DFVCP
penalty amount.
Annual reports that are filed under the DFVCP are subject to the usual
edit checks and other enforcement reviews. Plan administrators generally
will have an opportunity to correct deficiencies in accordance with the
procedures described in 29 CFR § 2560.502c-2. The failure to correct
deficiencies in accordance with these procedures may result in the
assessment of further deficient filer penalties.
No. The plan administrator is personally liable for the payment of
civil penalties assessed under ERISA § 502(c)(2). Therefore, civil
penalties, including penalties paid under the DFVCP, may not be paid from
the assets of an employee benefit plan.
Yes. Administrators of apprenticeship and training plans and
administrators of pension plans for a select group of management or highly
compensated employees (top hat plans), may file the applicable notice and
statement described in regulation §§ 2520.104-22 and 2520.104-23,
respectively, under the DFVCP in lieu of filing any past due annual
reports. By properly filing these statements and meeting the other
applicable DFVCP requirements, administrators will be considered as having
elected compliance with the exemption and/or alternative method of
compliance prescribed in §§ 2520.104-22, or 2520.104-23, as appropriate,
for all subsequent plan years.
The plan administrator must prepare the statement described in
regulation section 29 CFR §2520.104-22 and file it at the following
address:
U.S. Department of Labor
Employee Benefits Security Administration
Apprenticeship and Training Plan Exemption
200 Constitution Avenue, NW, N-1513
Washington, DC 20210
The plan administrator must also submit to the DFVC program, either on
paper through the mail or electronically.
If filing on paper, The plan administrator must also complete the most
current Form 5500 Annual Return/Report (without schedules or attachments),
items 1a–1b, 2a–2c, 3a–3c, and use plan number 999 for all
apprenticeship and training plans. The paper copy of the form must be
signed and dated, and be accompanied by a check for $750 made payable to
the U.S. Department of Labor, and sent to:
By Mail:
DFVCP
P.O. Box 70933
Charlotte, NC 28272-0933
By Private Delivery Service:
DFVCP
QLP Wholesale Lockbox - NC0810
Lockbox #70933
1525 West WT Harris Blvd
Charlotte, NC 28262
If submitting to the DFVCP electronically, follow the calculator
instructions for online payment at www.efast.dol.gov.
The applicable $750 penalty amount is for each DFVCP submission,
without regard to the number of plans maintained by the same plan sponsor
for which the notices and statements are being filed or the number of
participants covered by the plan or plans.
The plan administrator must prepare the statement described in
regulation section 29 CFR §2520.104-23 and file it at the following
address:
U.S. Department of Labor
Employee Benefits Security Administration
Top Hat Plan Exemption
200 Constitution Avenue, NW, N-1513
Washington, DC 20210
Note: If a plan sponsor has more than one top hat plan that is
participating in the DVFC program at the same time, a single statement
covering all of the plans may be filed consistent with the general
requirements for top hat plan filings under 29 CFR § 2520.104-23.
The plan administrator must also submit to the DFVC program, either on
paper through the mail or electronically.
If filing on paper, complete the most current Form 5500 Annual
Return/Report (without schedules or attachments), items 1a–1b, 2a–2c,
3a–3c, and use plan number 888 for all the top hat plans covered by the
top hat plan filing under 29 CFR § 2520.104-23. The paper copy of the
form must be signed and dated, and be accompanied by a check for $750 made
payable to the U.S. Department of Labor, and sent to:
By Mail:
DFVCP
P.O. Box 70933
Charlotte, NC 28272-0933
By Private Delivery Service:
DFVCP
QLP Wholesale Lockbox - NC0810
Lockbox #70933
1525 West WT Harris Blvd
Charlotte, NC 28262
If submitting to the DFVCP electronically, follow the calculator
instructions for online payment at www.efast.dol.gov.
The applicable $750 penalty amount is for each DFVCP submission,
without regard to the number of plans maintained by the same plan sponsor
for which the notices and statements are being filed or the number of
participants covered by the plan or plans.
A plan administrator is required to file an annual report for an
employee benefit plan beginning with the 1975 plan year. However, during
the DFVCP, the Department is targeting all plan years beginning on or
after January 1, 1988 -- the effective date of ERISA § 502(c)(2).
The DFVCP is not applicable to DFE filings made for master trusts,
pooled separate accounts, common/collective trusts and 103-12 IEs. The
Form 5500 filed by these DFEs is an integral part of the annual report of
the participating employee benefit plans. If a Form 5500 was timely filed
for the participating employee benefit plans, a failure to timely file a
DFE Form 5500 for these entities may cause the plan’s annual report to
be incomplete or inaccurate, but it does not result in the plan being a
late or non-filer. The plan’s Form 5500, however, may be subject to
rejection for being incomplete or inaccurate, and, if rejected, a plan
administrator who failed to correct the problem would be subject to
penalty assessments by the Department.
A Form 5500 filed for a group insurance arrangement (GIA) under the
Department’s regulations relieves the plan administrators of the
individual plans participating in the GIA from the requirement to file a
separate Form 5500 for each plan. The Department will allow a GIA that
failed to file a GIA Form 5500 on time to use the DFVCP to correct the
late filing. GIAs participating in the DFVCP are subject to the conditions
applicable to large plan filers.
No. Payment of a penalty under the terms of the DFVCP constitutes a
waiver of an administrator’s right both to receive a notice of
assessment from the Department and to contest the Department’s
assessment of the penalty amount. If the plan administrator chooses not to
waive these rights, the plan administrator must file with EFAST in
Lawrence, Kansas in the regular manner and not pursuant to the DFVCP.
Both the IRS and PBGC have agreed to provide certain penalty relief
under the Code and Title IV of ERISA for delinquent Form 5500s filed for
Title I plans where the conditions of the DFVCP have been satisfied. See
sections 5.02 and 5.03 of the DFVCP Federal Register Notice and IRS Notice
2002-23.
Forms may be obtained from the IRS by calling 1.800.TAX-FORM
(1.800.829.3676). Forms for certain pre-1999 plan years are also available
through the Internet sites for EBSA and the IRS. For further information
on EFAST filing requirements, see the EFAST Web site and the instructions
for the most current Form 5500.
For more information about the DFVCP, call EBSAs Office of the Chief
Accountant at 202.693.8360 or visit our Web site at www.efast.dol.gov.
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