Landry’s Landscaping has a profit sharing plan that they created in 2006. They tasked Matt, the VP of HR and Benefits, to prepare the Form which he did for 2006 and 2007 filings. At the time the 2008 filing was due, Matt was no longer employed.
Melissa, who took Matt’s job, did not realize that Matt had been preparing the Form 5500s. Landry’s with learning a new job, she forgot to calendar a reminder to look for the Form 5500 for 2008.
Eventually Landry’s retained a new financial advisor who started a service provider review of the plan. During the review, it was realized the plan hadn’t file a Form 5500 since 2007. Somehow the IRS had failed to notice the missing filings.
How did they fix it?
Oblivious decided to hire a new service provider team. One member of that team, the non-fiduciary third party administrator, agreed to be responsible for preparing the e-signature ready Forms each year going forward.
Oblivious also retained the non-fiduciary third party administrator to prepare all of the missing filings and deliver them e-signature ready. Oblivious e-signed the forms and submitted them through the DFVC program. While they did pay to have the forms prepared, the DOL penalties totaled $1,500 for them. If they had been caught on audit without using the program, assuming penalties of $1,100 per day per form for each day a form is late, the penalties would have been astronomically higher.
How did they avoid it in the future?
Melissa realized that she did not have the expertise to know if all of the plan’s required government filings were being completed. Nor did she know all of the deadlines. After discussion with the management team, Melissa retained the services of Fiduciary Outsourcing to act as the responsible plan fiduciary for all government filings.