401(k) plan administrators are obligated to file an annual Form 5500, or Annual Return/Report of Employee Benefit Plan. All of these filings must be done electronically with the Department of Labor through the EFAST website.
But what if you miss a year or so? How do you avoid penalties for the missed Form 5500 filing?
HERE’S HOW: File the delinquent return as soon as you can.
By using the DOL Delinquent Filer Voluntary Correction Program, you can immediately file delinquency as soon as you noticed it. Also, it is very important to correct this mistake before it is noticed by the DOL.
If you have found out about your error before the DOL notifies you of the missing Form 5500 filing, you only have to 
pay for the fees under the DFVCP program.
The fee under it is generally $10 per day late, with a max cap ranging from $750 to $2,000 per late filing. If you come to think of it, this is much less pricey than the penalties which will be imposed to you if the DOL notifies you first.
If DOL notifies you of the late Form 5500 filing, the penalty for late filing can run up to $1,100 per day with no cap!
Avoid the same mistakes again:
- Please keep in mind that it is your responsibility to file the Form 5500. The plan administrator has the responsibility for making sure that the return is filed timely. Never assume someone else is filing it for you.
- If you can make an identified person or a third-party service provider responsible for your timely filing of the Form 5500 return, please do so.
- Use a calendar that notes the deadline for filing the Form 5500 return, and arrange a communication mechanism to alert your plan administrator and any outside service provider of the upcoming deadline to file.
To help you design a retirement plan that will put you on the right path, contact us at Prenger & Profitt for a consultation!
We ensure you stay compliant in whatever form you are required to file, and guide you to meet the needs of your business!
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