Missing that deadline to file a Form 5500 is a huge problem. Sometimes people forget even when the Third Party Administrator (TPA) completes it promptly. I\u2019ve had clients not realizing they had a year or two years\u2019 worth of 5500s that needed to be filed.<\/p>\n
The greatest mistake they made was filing those late 5500s. Why? Well, they didn\u2019t file those Form 5500s, coupled with a contemporaneous filing of an application to the Department of Labor\u2019s Delinquent Filer Voluntary Compliance Program (DFVCP). By not filing with the DFVCP, a plan sponsor can get a crippling penalty of $150,000 per year (depending on how long the Forms are outstanding). It\u2019s unsettling when the penalty amount of the DFVCP could be just $1,500 maximum.<\/p>\n
The problem is so many plan sponsors aren\u2019t aware of this option and there is only so much a TPA can do. So that\u2019s why I\u2019m mentioning that filing a late 5500 without DFVCP is a weapon of mass destruction.<\/p>\n
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