#5
Critical Risk
Not Keeping Up with Reporting Obligations
Form 5500 fines include IRS penalty of per day up to and Department of Labor fine of per day with no maximum.
- Potential Consequences
- Unlimited DOL fines
- IRS penalties
- Audit triggers
- Compliance violations
- Prevention Tips
- Maintain annual filing calendar with deadlines
- File Form 5500 by July 31st (or October 15th with extension)
- Update Summary Plan Descriptions every 5 years
- Distribute required participant notices timely
- Document all participant complaints and responses
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A plan’s sponsor’s responsibilities are plenty, but foremost among these is to ensure that reports are kept up to date, and where appropriate, filed with the proper government agency.
Form 5500 is one of the most critical filings. Late or missed submissions can result in significant penalties imposed by both the IRS and the Department of Labor.
Additionally, a Summary Plan Description must be provided at the startup of the plan, then at least once every five years as well to all participants upon request.
Failing to deliver participant notices, including the 404(a) fee disclosure, participant eligibility and summary annual reports
And when a participant files a complaint, oral or written, be sure to document and address it completely.
"Bureaucracy gives birth to itself and then expects maternity benefits."
— Dale Dalton
