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February 21, 2013

Delinquent Filer Voluntary Compliance (DFVC) Program

Several years ago, a Delinquent Filer Voluntary Compliance (DFVC) Program was instituted to encourage ERISA plans to bring their annual filing into compliance (see Delinquent Filer Voluntary Compliance (DFVC) Program Update, Benefit Beat, 4/1/2002).  The incentive, of course, is significantly reduced penalties.  

For plans with fewer than 100 participants at the beginning of the plan year, 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, not to exceed the greater of:

  • $750 per annual report or,
  • in the case of a DFVC Program submission relating to more than one delinquent annual report for the plan, $1,500 per plan.

For plans with 100 or more participants at the beginning of the plan year, 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, not to exceed the greater of:

  • $2,000 per annual report; or
  • In the case of a DFVC Program submission relating to more than one delinquent annual report for the plan, $4,000 per plan.

In January, 2013, the Department of Labor issued a Technical Update, a Fact Sheet and FAQs restating and updating the program. 

Of particular note, all filings must be made electronically and generally, filings are made on the current year Form 5500, though there is a chart to determine what forms and schedules to include.  This is particularly important since there have been significant revisions to the Form 5500 and schedules in recent years.  Also included in the recently issued guidance is a tool to assist in calculating the penalties.

 

The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.

As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

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