Plan administrators are eligible to pay reduced civil penalties under the program if the required filings under the DFVCP are made prior to the date on which the administrator is notified in writing by the department of a failure to file a timely annual report under Title I of the Employee Retirement Security Act of 1974 (ERISA).
Participation under the DFVCP is not available to all Form 5500 series filers.
For example, assume an administrator for a plan with a calendar plan year files the annual report for the 2009 plan year on October 31, 2010, and does not participate in the DFVCP.
The DOL has published guidance stating that participation in the DFVCP is a two part process:
It is recommended that all filings for a plan be submitted to the DFVCP in the same envelope or package in order to ensure that those filings count towards the "per-plan" capped penalty amount.
Under the 1995 DFVCP, plan administrators filing the Form 5500-C (plans with fewer than 100 participants at the beginning of the plan year or plans filing the Form 5500-C pursuant to the "80-120" participant rule in Labor Reg.
The applicable penalty amount under the DFVCP was revised by the DOL under the 2002 DFVCP by reducing the per day penalty from $50 to $10 per day for delinquent filings, reducing the per maximum penalty for a single late annual report from $2,000 to $750 for a small plan and from $5,000 to $2,000 for a large plan, and including a new "per plan" cap which applies to plan administrators who have failed to file an annual report for a plan for multiple years.
The DOL also revised the applicable penalty structure under the 2002 DFVCP for apprenticeship and training plans and "top hat" plans, and added another class of plans that are eligible to pay special reduced penalties under the Program.
Guidance by the DOL states that the applicable penalty amounts under the 2002 DFVCP are now determined as follows:
In the case of a DFVCP submission relating to more than one delinquent annual report filing for the same plan, the maximum penalty amount is $750 for each annual report, not to exceed $1,500 per plan.
In the case of a DFVCP submission relating to more than one delinquent filing for the same plan, the maximum penalty amount is $2,000 for each annual report, not to exceed $4,000 per plan.