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401(k) Plan Fix-It Guide - You haven't filed a Form 5500 and haven't distributed a Summary Annual Report to plan participants this year



Find the Mistake

Fix the Mistake

Avoid the Mistake

12) You haven't filed a Form 5500-series return and haven't distributed a Summary Annual Report to plan participants this year.

Find your signed copy of the return and determine if you filed it timely.  File all delinquent returns. Understand your filing requirement and know who filed and when. Don’t assume someone is taking care of it for you.

ERISA requires employers and plan administrators to submit reports to government agencies and furnish certain plan information to participants. Plan sponsors are generally required to file annually a Form 5500, Annual Return/Report of Employee Benefit Plan, for an employee benefit plan subject to ERISA. Most employers that sponsor a 401(k) plan are required to file this return. For an explanation of how to file your Form 5500 return, in addition to the EFAST electronic filing requirements, please visit

In addition to the Form 5500, you must make certain other plan information is available to participants:

  • Summary Plan Description – This plain language explanation of the plan must be comprehensive enough to apprise participants of their rights and responsibilities under the plan. Among other things, the SPD must include information about:
    • when and how employees become eligible to participate
    • the source of contributions and contribution levels
    • vesting – the length of time an employee must be in the plan to receive benefits
    • how to file a claim for those benefits
    • participant’s basic rights and responsibilities under ERISA

You must give this document to your employees after they join the plan and to beneficiaries after they first receive benefits. You must also redistribute SPDs periodically and provide them on request.

  • Summary of Material Modification – Apprises participants and beneficiaries of plan changes or to information required to be in the SPD. You must provide the SMM or an updated SPD to the participants and beneficiaries within 210 days after the end of the plan year in which you adopted the change
  • Summary Annual Report – Outlines in narrative form the financial information in the Form 5500. You must furnish this to participants annually.
  • Individual Benefit Statement – Provides participants with information about their account balances and vested benefits. Plans must automatically provide statements to participants quarterly for participant-directed plans and annually for plans that do not permit participant direction.
  • Blackout Period Notice – For profit-sharing and 401(k) plans, at least 30 days (but not more than 60 days) advance notice is required before a plan is temporarily closed for more than 3 consecutive business days to certain participant transactions (directing investments, taking loans or taking distributions). Typically, blackout periods occur when plans change record keepers or investment options, or when plans add participants because of a corporate merger or acquisition.

How to find the mistake:

Many employers identify this mistake when they receive a letter from IRS or DOL stating the employer didn't file the Form 5500-series return. It’s normally a year after it was due and includes a substantial fine. Late filed returns are subject to penalties from both IRS and DOL, so it’s very important to identify this mistake before we do. The penalties are:

  • The IRS penalty for late filing of a return is $25 per day, up to a maximum of $15,000.
  • The DOL penalty for late filing can run up to $1,100 per day, with no maximum.

To identify this mistake, find your signed copy of the return, and determine if it you filed it timely.

How to fix the mistake:

Correction of a late filed Form 5500 is not available under EPCRS. If you determine you didn't file your Form 5500-series return, the correction is filing the delinquent return. File the delinquent return as soon as possible. DOL maintains a Delinquent Filer Voluntary Correction Program (DFVC) . However, DFVC is not available for Form 5500-EZ filers.

  • IRS is responsible for determining any late filer penalty for a Form 5500-EZ.
    Submit a reasonable cause statement with the late Form 5500-EZ explaining why the return was late.
  • IRS will review the reasonable cause statement and may reduce or waive the penalty.

Employer Z sponsors a 401(k) for its employees and failed to file a Form 5500-series return for the 2011 year.

Corrective action:
Failing to file a Form 5500 return is not correctable under EPCRS. If the IRS contacts you regarding a delinquent Form 5500-series return, you may file it in response to the letter. Include an explanation regarding why you didn't file the return and request a waiver of the penalty. In addition, the Department of Labor has a Delinquent Filer Voluntary Correction Program (DFVC).

If Employer Z sponsors a one-participant plan required to file a Form 5500-EZ return, DFVC isn't available. Form 5500-EZ filers are subject to the IRS penalties of $25 per day, up to $15,000. Form 5500-EZ filers should file the delinquent Form 5500-EZ return immediately, along with an explanation regarding why the return wasn’t filed.

How to avoid the mistake:

  • Understand your responsibilities to file the return. The plan administrator has the responsibility for making certain the return is filed timely. Never assume someone else is filing the return for you.
  • Make an identified person or outside service provider responsible for timely filing the return.
  • Use a calendar (tickler file) that notes the deadline for filing the return; and implement a communication mechanism to alert the plan administrator and any outside service providers of the upcoming deadline to file.

401(k) Plan Fix-It Guide
401(k) Plan Overview
EPCRS Overview
401(k) Plan Fix-It Guide (pdf)
401(k) Plan Checklist
Additional Resources / Retirement Plans / Correcting Plan Errors / Fix-It Guides / Potential Mistake

Page Last Reviewed or Updated: 28-Aug-2013