Failing to file Form 5500 on time can lead to significant penalties, especially if the noncompliance is discovered during a Department of Labor (DOL) audit.
Standard penalties:
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As of 2024, the DOL can assess civil penalties of up to $2,670 per day for each day the filing is late or missing.
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The IRS may also impose separate fines for noncompliance in certain situations.
Voluntary correction:
The Delinquent Filer Voluntary Compliance Program (DFVCP) allows plan sponsors to file late Form 5500s at a reduced rate to avoid harsher penalties.
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For most health and welfare plans, the penalty is capped at $2,000 per plan, or $4,000 if multiple years are filed at once.
Employers who suspect a past due filing should act quickly to correct it voluntarily before being contacted by the DOL, as that can eliminate eligibility for the discounted penalty.