Employment Law Updates

MISTAKES HAPPEN—DOL PROGRAM TO ALLOW LATE FILING OF FORM 5500 FOR AN EMPLOYEE BENEFIT PLAN

Each year most pension and welfare benefit plans subject to ERISA must file a Form 5500 to report their financial condition, investments, and operations (some plans need not file Form 5500, such as unfunded or insured plans with under 100 participants).  Very large penalties can be imposed for late filing or non-filing of Form 5500.  The Department of Labor’s Delinquent Filer Voluntary Compliance (DFVC) Program allows plan administrators to voluntarily correct a late or unfiled Form 5500 by submitting a completed Form 5500 and paying a greatly reduced penalty.  For a brief explanation of the DFVC Program, click here.   For answers to frequently asked questions, click here.

MISTAKES HAPPEN—IRS PROGRAM TO CORRECT ERRORS IN ADMINISTERING QUALIFIED RETIREMENT PLANS

Qualified retirement plans must be operated according to the terms of their plan documents and the requirements of the tax code.  Failure to meet this “operational” requirement jeopardizes the plan’s tax favored status.  If an employer’s plan fails this operational requirement, the employer can usually correct the error by using the Internal Revenue Service correction program known as the Employer Plans Compliance Resolution System (EPCRS).  Some errors can be “self-corrected” under EPCRS without asking IRS approval.  Others require submitting an application and supporting documents to the IRS.  To learn more about EPCRS and correcting plan errors, click here.  To see whether you can self-correct an error, look for the Self-Correction Program and the Eligibility Flowcharts links toward the bottom right of the page.