URGENT! DOL SEEKING OUT FORM 5500 NON FILERS

The ERISA experts and Form 5500 provider at Benefits Compliance Consultants, Inc., have recently been made aware of information that we deem pertinent to our clientele:

PROBLEM: The DOL is using employer’s identification numbers (EIN) to crosscheck records between retirement plan filings and welfare plan filings in the EFAST2 system. The DOL is aware that while some employers file Forms 5500 for their retirement plans, they may be unaware that filings also MUST be made for their health and welfare benefit plans. Any unfunded employee welfare benefit plan that covers 100 or more participants at the beginning of the plan year whether it is fully employer paid or employee paid must file a Form 5500 for that year. Each benefit provided under the plan is subject to report to the DOL on the Form 5500, regardless of each contract covered lives count.

PENALTY: Administrators of employee benefit plans subject to ERISA who fail to file annual reports on a timely basis can be subject to civil and criminal penalties. The Secretary of Labor has the authority to assess civil penalties up to $1,100 per day against plan administrators for failure or refusal to file the Form 5500. Criminal penalties are also possible. Any individual who willfully violates any provision of Part 1 of Title I of ERISA (which includes the Form 5500 reporting) shall be fined not more than $100,000, or imprisoned for no more than 10 years or both.

SOLUTION: We suggest that you confirm that if any plan(s) were subject to filing(s) in the past. If delinquent, we suggest that we prepare the filings as soon as possible and file under the Delinquent Filer Voluntary Compliance Program (the “DFVC Program”) for missed Form 5500.  Under the DFVC Program, an eligible plan administrator who failed to file a timely Form 5500 avoids the potentially large civil penalties (up to $30,000 per year) by voluntarily filing the late Form 5500 return and paying a smaller pre-determined penalty (generally $2,000 per year, but not to exceed $4,000 for multiple year delinquencies).

If you or your client(s) receive a letter, contact us immediately. A timely response to the information request is critical. If you have filed the return in question, or, if you believe you are not required to file, we can help you to determine as well as assist with drafting an explanation. These letters are intended to initiate a compliance check. Failure to respond may not, be cause for an audit; however, a failure to file a required return will necessitate other measures and possibly result in assessed penalties to ensure compliance.

QUESTIONS? Email us at info@bc2co.com, or call us at (515) 244-2424. We will be glad to answer any questions you have about the DOL’s New Project and how it relates to you and your clients. We offer our clients a confidential, cost effective, turn key approach along with the unsurpassed service they have come to expect. Learn more about Benefits Compliance Consultants at www.bc2co.com.

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