Under ERISA, the three government agencies responsible for regulating retirement and welfare benefit plans (e.g., medical insurance, life insurance and disability plans) - the Internal Revenue Service (IRS), the Department of Labor (DOL) and the Pension Benefit Guaranty Corporation (PBGC) - require an employer to file an annual report (Form 5500) with respect to its retirement plans and its welfare benefit plans.
Who needs to file:
-As a general rule any Welfare or Pension plan with more then one participant.
-The "plan administrator" is legally responsible for filing the form. As a general rule, the employer is the plan administrator. This is different than the third-party plan administrator who one may hire to administer the plan. The third-party administrator is not responsible for filing the form.
Then is the filing deadline:
The deadline is the last day of the seventh month following the end of the plan year. If your plan year is a calendar year (ending December 31) then your form is due July 31.
Extensions:
A plan sponsor can obtain an automatic extension by filing an extension (Form 5558) with the DOL.
Exempt Entities:
The following entities are not subject to the filing requirements:
-Welfare plans: Cafeteria plans and certain welfare plans with less then 100 employees which are fully insured.
-Pension plans: SIMPLE IRA´s, SEP´s, church and government plans
Non-Compliance:
ERISA requires most employer-sponsored plans to file the Form 5500 annually. Plan administrators who fail to comply with ERISA''s requirement may face civil penalties of up to $1,100 per day for each report. Likewise, the IRS may assess penalties of $25 per day (up to $15,000) for failure to file returns for certain pension and profit sharing plans in a timely manner.
According to the DOL from 1993 through April 1, 2003 they have assessed over $151 million in civil penalties to late and non-fliers.
Delinquent Voluntary Compliance:
There is a program to assist in filing delinquent reports - The Delinquent Filer Voluntary Compliance Program (DFVC) which was established to encourage plan administrators to file overdue annual reports by paying reduced penalties. Recently the DOL and IRS announced a program easing compliance by substantially reducing the maximum penalties to $4000.00 per filing regardless of how many years are filed. However, a company who has already been notified by the federal agencies about a delinquent filing is not eligible to participate in the DFVC program and can be subjected to maximum penalties with no limit. It is, therefore, to your advantage to take the initiative to bring your plan into compliance immediately.