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September 29, 2022

Form 5500 Filing Deadline Approaching for 401(k) Plan Sponsors

As we approach October 17th, the deadline is drawing near for the filing of your Form 5500 if you are the Plan Sponsor of a 401(k) Plan.  This deadline only applies if your plan uses a calendar year-end (this means the dates for the Plan year run from January 1 to December 31).  For calendar year-end Plans, the initial deadline for filing your Form 5500 is the end of July.  However, your service provider should have filed an extension of time to file which provides for the extension until October 17th for 2022.  Many Plans that require an audit actually file after the original due date so using the extension is not unusual.

If you are ready for the filing, we recommend you discuss the filing process with your service provider as quickly as possible.  The final Form 5500 must be filed on the Department of Labor EFAST2 system, and this system has a limited capacity.  The closer you get to the October 17th deadline, the more difficult it will get to be able to logon to the system and successfully the file.  Also, since this is a task you most likely only due once a year, it may take some time to reacquaint yourself with the filing procedure, find your login information (if needed) and to review the final documents to ensure their accuracy before the filing

So, what if you can’t complete the filing on-time?  What should you do next?  One option you may want to consider is using the Department of Labor Delinquent Filer Program.  This program is titled the Delinquent Filer Voluntary Compliance Program or DFVCP.  This program allows you to admit that you did not complete the required compliance activities in time which made the filing late.  The filing process is fairly straight forward and can help you avoid more costly fines and penalties associated with filing late.

It should be noted that this option can only be used if you have not been notified in writing by the DOL that they identified that you have not filed or not filed timely.  Remember the title is “Voluntary” so you cannot respond to a DOL penalty assessment with a voluntary filing.

To take advantage of tis program, you should electronically file a complete Form 5500 on the EFAST2 System.  This means that the Form 5500 must be complete, and the annual audit (if required) must also be completed first.  Then you need to go online and file the 5500, audit report and any other needed schedules.  Make sure that the DFVC program box online D of Part I of the Form 5500 is checked.  This indicates to the DOL that you are filing under the program.

The second part of the program is to pay the penalty.  The basic penalty is $10 per day from the original due date of the Form.  For example, calendar year plans are originally due for filing by July 31st.  Most service providers will obtain an extension that provides time to file through October 15th.  However, if the filing is not completed by the 15th, the original due date of July 31st applies.  If you actually filed the form on October 20th, you would need to calculate the late penalties from August 1st – October 20th.  The maximum penalty for a large plan filer is $2,000.  While this is a lot of money, it is much less than the penalty the DOL will assess if they identify the error.

The DOL has an online calculator that you can use to simplify the calculation process.

We recommend you consider this option for filing your Form 5500 if you need more time to file than the regulations allow.

For more information on how we can help, request a free consultation below or contact the team at (314)-886-7913 to discuss your unique 401(k) audit needs.

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