There are few things more maddening, more viscerally frustrating, than watching a plan sponsor or service provider steer themselves into the abyss out of sheer pride or ignorance\u2014or worse, some toxic blend of both. But in the twilight centuries of the 5500s, nothing tested my patience quite like the decision not to use the DFVCP.<\/p>\n
Let me be clear: the Department of Labor\u2019s Delinquent Filer Voluntary Compliance Program (DFVCP) is a gift. A golden parachute for those who stumble, an amnesty for the well-intentioned but disorganized. It\u2019s not just a program\u2014it\u2019s a lifeline. And yet, somehow, year after year, I would encounter plan sponsors\u2014employers, trustees, alleged fiduciaries\u2014who chose not to grab hold.<\/p>\n
You\u2019d sit across from them, the ink on the late Form 5500s still drying, and you\u2019d explain it calmly, like you\u2019re talking to someone dangling from a ledge. \u201cYou\u2019re late. You\u2019ve missed a required filing. But if you act now, if you enter the DFVCP voluntarily, the penalty is capped. You control the narrative. You retain dignity.\u201d<\/p>\n
And still, the response: \u201cLet\u2019s wait. Let\u2019s see if the DOL notices.\u201d<\/p>\n
The DOL always notices.<\/p>\n
It was maddening because it wasn\u2019t just about money, though the penalties outside DFVCP could be catastrophic. It was about mindset. The DFVCP was built on a principle I respect deeply\u2014redemption. A structured way to admit a mistake, make amends, and move forward without getting devoured by the very system designed to ensure compliance.<\/p>\n
But so many couldn\u2019t see it. Maybe they\u2019d been taught that compliance was an adversarial game, that if you admitted fault you invited disaster. Maybe they were emboldened by years of evasion. Or maybe, and this is the one that made me want to scream into my coffee mug, they just didn\u2019t want to pay anything.<\/p>\n
So they\u2019d roll the dice. Ignore my counsel. Decline DFVCP. And inevitably, months later, I\u2019d get the call, their voice hushed and panicked:<\/p>\n
\u201cWe just got a letter from the DOL.\u201d<\/p>\n
And I\u2019d take a breath. Not to stay calm\u2014I was calm. But to keep from saying, \u201cI told you so.\u201d<\/p>\n
You don\u2019t get points for pride in ERISA. You get penalties.<\/p>\n
In those late years, as the industry automated and compliance tools became smarter, I often wondered why we still needed to have this conversation. Why, even with the ghosts of civil penalties looming large, people still believed they could outmaneuver time and regulation.<\/p>\n
But then again, maybe that\u2019s the curse of my profession\u2014the long war between logic and hubris.<\/p>\n
And in that war, the DFVCP was one of our few truces.<\/p>\n
Refusing it? That was the madness.<\/p>\n
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