By: HUB’s EB Compliance Team

If you have ever been late in filing Form 5500, you may be familiar with the Delinquent Filer Voluntary Compliance Program, or the DFVCP. Last year HUB presented a series on all aspects of Form 5500, including this article where DFVCP was noted as a way to access penalty relief when filing past the deadline. In this article we will provide more detail about the DFVCP and also summarize some recent modifications to the program by the Department of Labor (“DOL”) that were enacted to encourage voluntary compliance with ERISA’s reporting requirements.

Form 5500 Refresher

The Employee Retirement Income Security Act of 1974 (“ERISA”) sets various standards for employer retirement and health plans, including the requirement to file an annual report. That report, the Form 5500, satisfies reporting requirements for not just the DOL, but also the IRS and the Pension Benefit Guaranty Corporation (“PBGC”). The Form 5500 is typically due the last day of the seventh month after the plan year ends, which would be July 31 for calendar-year plans. Plans may also use Form 5558 to request an extension on that deadline, granting an extra 2.5 months to file the reports (making a calendar-year plan filing due on October 15).

The DOL can assess a penalty of up to $2,739 per day for each day that the filing is late, with no limit. The PBGC, when applicable, uses the same penalty amounts. The IRS can also assess a penalty of up to $250 per day, capped at $150,000 per plan year, plus interest. All agencies can impose penalties for the same missed filing, as each has their own reporting requirements. Abatement from DOL penalties is offered via the DFVCP. The IRS offers abatement through the submission of a letter of reasonable cause, but if a plan meets all DFVCP conditions, the IRS and PBGC generally extend relief for their penalties as well.

DFVCP Basics

The DFVCP was introduced in 1995 in an effort to allow plan administrators to correct delinquent Form 5500 filings for a significantly lower cost than if the DOL discovered the non-compliance first. If a plan has been notified of a failure to file an annual report by the DOL, they can no longer use the DFVCP.

To use the DFVCP, a plan administrator, or its representative, first needs to file the late or missed Form 5500 electronically using the DOL’s EFAST2 website. When filing the form, they should mark the “DFVC Program” box in Part 1, line D. That mark indicates that the filing will shortly be followed by the submission of the DFVCP penalty payment. After filing the missed Form 5500, the plan administrator should then use the DFVC Program calculator, found here. The calculator first asks you to search for the filing (which is why it’s important to submit the Form 5500 first) and then uses that filing, once located, to provide a total penalty amount. The penalty then must be paid online through the DOL website.

DFVCP Updates

The Employee Benefits Security Administration (“EBSA”), the agency of the DOL that enforces reporting requirements, announced expanded rules for the DFVCP on December 30, 2025. The rules went into effect on December 31, 2025.

The new rules expand the types of entities that can use the DFVCP beyond just employer plans filing the Form 5500. The DFVCP can now also be used by multiple employer welfare arrangements (“MEWAs”) and Entities Claiming Exception (“ECEs”). These entities file Form M-1 in addition to a Form 5500. The DOL can assess a penalty of up to $1,942 per day for each day that an M-1 filing is late, with no limit. So, just like with Form 5500, delinquent M-1 filers can now also use the DFVCP and pay a reduced penalty. The reduced penalty for a delinquent Form M-1 is a flat $750.

Takeaways

For typical employer retirement and health plans, remember that the DFVCP is available on the occasion you miss a Form 5500 filing or discover a prior year’s filing that was never properly completed. If you are an entity needing to file a late Form M-1, you may also now use the DFVCP to pay a reduced penalty, while remaining compliant under ERISA’s reporting rules.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER
Neither HUB International Limited nor any of its affiliated companies is a law or accounting firm, and therefore, they cannot provide legal or tax advice. The information herein is provided for general information only and is not intended to constitute legal or tax advice as to an organization’s or individual's specific circumstances. It is based on HUB International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect, and HUB International does not have an obligation to update this information. You should consult an attorney, accountant or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your or your organization’s particular needs.