Why Is 5500 Filing Timeliness An Issue?
Filing a Form 5500 on a timely basis is important to demonstrate fiduciary responsibility and avoid costly penalties. Here are some important considerations related to the filing of Form 5500:
- DOL Penalties for Late or Incomplete Filing of Form 5500 – The Department of Labor can assess a penalty of $1,100 per day for a material failure or refusal to file an annual report. In addition, plans that do not take advantage of the Delinquent Filer Voluntary Compliance Program (DFVCP) with the DOL may be assessed an unlimited penalty of $50 per day for late filers and a $300 a day penalty up to $30,000 per year for non-filers. The DOL may also apply other penalties.
- IRS Penalties for Failure to Complete Annual Returns – The IRS may assess a $25 per day penalty up to $15,000 for failure to file a complete return. The IRS will not assess this penalty if the plan files under DFVCP.
- 5500 Filings Without Audited Financial Statements (When They are Required) – If a plan is required to attach audited financial statements to the return and fails to do so, the 5500 would not be considered a valid filing.
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The information contained herein is not necessarily all inclusive, does not constitute legal or any other advice, and should not be relied upon without first consulting with appropriate qualified professionals for your plan’s individual facts and circumstances.
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