Fiduciary Education Campaign
Getting It Right - Know Your Fiduciary Responsibilities Secretary of Labor Elaine L. Chao launched a nationwide campaign to improve workers' health and retirement security by educating employers and service providers about their fiduciary responsibilities under the Employee Retirement Income Security Act (ERISA).  This is the latest in a series of compliance assistance initiatives by the Department's Employee Benefits Security Administration (EBSA). Plan sponsors and other fiduciaries have a solemn responsibility to protect the interests of the workers and retirees in their benefit plans.  The Department's program - "Getting It Right - Know Your Fiduciary Responsibilities" - will provide employers and plan officials with an understanding of the law and their responsibilities and will focus on steps for avoiding the most common problems EBSA encounters in its enforcement activities. The program will emphasize the obligation of plan sponsors and other fiduciaries to: Understand the terms of their plans; Select and monitor service providers carefully; Make timely contributions to fund benefits; Avoid prohibited transactions; and Make timely disclosures to workers and their beneficiaries and reports to the government.
The Fiduciary Education Campaign includes nationwide educational seminars to help plan sponsors understand rules and meet their responsibilities to workers and retirees, thereby improving their financial security.  The campaign also includes educational materials on topics such as understanding fees and selecting an auditor. EBSA is sponsoring the campaign in partnership with the Society of Human Resource Management, the National Federation of Independent Business, the American Institute of Certified Public Accountants, and the U.S. Small Business Administration.
Listen to the audio news clip with Secretary Chao's remarks: [MP3] • [WAV] Read Assistant Secretary Comb's remarks Press Release announcing the launch of the campaign Publications Meeting Your Fiduciary Responsibilities - To meet their responsibilities as plan sponsors, employers need to understand some basic rules, specifically the Employee Retirement Income Security Act (ERISA).  ERISA sets standards of conduct for those who manage an employee benefit plan and its assets (called fiduciaries).  This publication provides an overview of the basic fiduciary responsibilities applicable to retirement plans under the law. Understanding Retirement Plan Fees And Expenses - This booklet will help retirement plan sponsors better understand and evaluate their plan's fees and expenses.  While the focus is on fees and expenses involved with 401(k) plans, many of the principles discussed in the booklet also will have application to all types of retirement plans. 401(k) Plan Fee Disclosure Tool - A form that provides employers with a handy way to make cost-effective decisions and compare the investment fees and administrative costs of competing providers of plan services.  Now available in MS Word format. Selecting An Auditor For Your Employee Benefit Plan - Federal law requires employee benefit plans with 100 or more participants to have an audit as part of their obligation to file the Form 5500.  This booklet will assist plan administrators in selecting an auditor and reviewing the audit work and report. Selecting And Monitoring Pension Consultants - Tips For Plan Fiduciaries - ERISA requires that fiduciaries of employee benefit plans administer and manage their plans prudently and in the interest of the plan’s participants and beneficiaries. In carrying out these responsibilities, plan fiduciaries often rely heavily on pension consultants and other professionals for help. Findings included in a report by the SEC released in May 2005, however, raise serious questions concerning whether some pension consultants are fully disclosing potential conflicts of interest that may affect the objectivity of the advice they are providing to their pension plan clients. Tips For Selecting And Monitoring Service Providers For Your Employee Benefit Plan - Business owners are responsible for ensuring that their 401(k) plans comply with Federal law and rely on other professionals to assist them with their plan duties. Selecting a service provider is one of the most important responsibilities of a plan sponsor. Reporting and Disclosure Guide for Employee Benefit Plans - This guide is intended to be used as a quick reference tool for certain basic reporting and disclosure requirements under ERISA. Voluntary Fiduciary Correction Program The Voluntary Fiduciary Correction Program (VFCP) is designed to encourage employers to voluntarily comply with ERISA by self-correcting violations of the law. Workers can benefit from the program as a result of the increased retirement security associated with restoration of plan assets and payment of additional benefits. The program also will help plan officials understand the law. In addition, the Department is giving applicants immediate relief from payment of excise taxes under a class exemption. VFCP Online Calculator • VFCP Fact Sheet • FAQs • FR Notice • Class Exemption • Class Exemption FAQs VFCP Application Checklist • Sample No Action Letter Delinquent Filer Voluntary Compliance Program The Delinquent Filer Voluntary Compliance Program (DFVC) is designed to encourage voluntary compliance with the annual reporting requirements under ERISA. The program gives delinquent plan administrators a way to avoid potentially higher civil penalty assessments by satisfying the program’s requirements and voluntarily paying a reduced penalty amount. To increase incentives for delinquent plan administrators to voluntarily comply, the Department reduced penalties and simplified the rules governing participation in the program.       Frequently Asked Questions about the Delinquent Filer Voluntary Compliance Program What is the Delinquent Filer Voluntary Compliance Program (DFVC)? In an effort to encourage pension and welfare plan administrators to file overdue annual reports (commonly referred to as the Form 5500), the Department of Labor’s Employee Benefits Security Administration (EBSA) is providing plan administrators with the opportunity to pay reduced civil penalties for voluntarily complying with the annual reporting requirements.   Who is eligible to participate in the DFVC Program? Plan administrators are eligible to pay reduced civil penalties under the program if the required filings under the DFVC Program 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).   Is participation under the DFVC Program available to all Form 5500 Series filers? No. The relief under the DFVC Program is available only to the extent that a Form 5500 is required to be filed under Title I of ERISA. For example, Form 5500-EZ filers and Form 5500 filers for plans without employees (as described in 29 CFR § 2510.3-3(b) and (c)) are not eligible to participate in the DFVC Program because such plans are not subject to Title I of ERISA. Plan administrators may call 202.693.8360 if they have questions about whether the program applies to their filings.   What civil penalties may be assessed by the Department against plan administrators who fail to file a timely annual report and who do not participate in the DFVC Program? The following penalties may be assessed against plan administrators: Late Filers - Plan administrators filing a late annual report (i.e., after the date the report was required to be filed, including extensions) may be assessed $50 per day, with no limit, for the period they failed to file, determined without regard to any extensions for filing. Non-Filers - Plan administrators who fail to file an annual report may be assessed a penalty of $300 per day, up to $30,000 per year, until a complete annual report is filed. For example, assume an administrator for a plan with a calendar plan year files the annual report for the 2001 plan year on October 31, 2002, and does not participate in the DFVC Program. The administrator would receive a written notice indicating the Department’s intent to assess a penalty of $4,600 ($50 x 92 days delinquent). If there are other annual reports that either have not been filed or have been filed late, the plan administrator may be subject to the assessment of additional penalties because the penalties are separately calculated for each filing. Pursuant to the Department’s regulations, upon issuance by the Department of a notice of intent to assess a penalty, the plan administrator may file a statement of reasonable cause why the penalty, as calculated, should not be assessed. A showing of reasonable cause must be in the form of a written statement setting forth all the facts alleged as reasonable cause and must contain a declaration by the administrator that the statement is made under penalty of perjury.   How does a plan administrator file a delinquent Form 5500 under the DFVC Program? Participation in the DFVC Program is a two part process: First, file a complete Form 5500 Annual Return/Report, including all schedules and attachments, for each year the plan administrator is requesting relief. This filing should be sent to EBSA at the appropriate ERISA Filing Acceptance System (EFAST) address listed in the instructions for the most current Form 5500 Annual Return/Report, or electronically in accordance with the EFAST electronic filing requirements. The EFAST addresses in the 2001 Form 5500 instructions are as follows: Paper: Employee Benefits Security Administration P.O. Box 7043 Lawrence, Kansas 66044-7043 Floppy Disc, CD-Rom or Tape: Employee Benefits Security Administration P.O. Box 7041 Lawrence, Kansas 66044-7041 Private Delivery Service: EBSA/NCS Attn: EFAST 3833 Greenway Drive Lawrence, Kansas 66046-1290 Second, submit the following to: DFVC Program P.O. Box 530292 Atlanta, Georgia 30353-0292 A paper copy of the completed Form 5500, without schedules or attachments, for any filings using a 1999 or later version of the Form (or a paper copy of the first page of the Form 5500 or Form 5500-C, as applicable, for filings submitted on pre-1999 versions of the Form). A check for the applicable penalty amount, made payable to the U.S. Department of Labor. If the submission is for a small plan sponsored by an Internal Revenue Code (Code) § 501(c)(3) organization (including a Code section 403(b) small plan), the notation 501(c)(3) Plan must be in the upper-right corner of the paper copy of the first page of the Form 5500 submitted to the DFVC Program in Atlanta, Georgia. This notation should not be included in the filing made with EBSA in Lawrence, Kansas. It is recommended that all filings for a plan be submitted to the DFVC Program in the same envelope or package in order to ensure that those filings count towards the per-plan capped penalty amount.   Which version of the Form 5500 should be filed? The plan administrator shall file either: The most current Form 5500 Annual Return/Report form issued (and, if necessary, indicate in the appropriate space on the first page of the Form 5500 the plan year for which the annual return/report is being filed) The Form 5500 Series Annual Return/Report form issued for the plan year for which the relief is sought (but not a Form 5500-R if the filing is for a 1998 plan year or a prior year)   What is the applicable penalty amount? Small Plan Filers - In the case of a plan with fewer than 100 participants at the beginning of the plan year (hereinafter small plan), the applicable penalty amount is $10 per day for each day the annual report is filed after the date on which the annual report was due (without regard to any extensions), not to exceed $750. In the case of a DFVC 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. Note: The 80/120 participant rule described in 29 § CFR 2520.103-1(d) is applicable in determining whether a plan is a small or large plan. Large Plan Filers - In the case of a plan with 100 or more participants at the beginning of the plan year and which is not eligible for the 80/120 participant rule (hereinafter large plan), the applicable penalty amount is $10 per day for each day the annual report is filed after the date on which the annual report was due (without regard to any extensions), not to exceed $2,000. In the case of a DFVC 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. It is recommended that all filings for a plan be submitted to the DFVC Program in the same envelope or package in order to ensure that those filings count towards the per-plan capped penalty amount. Example 1 - An administrator of a large plan with a calendar year plan year files the annual report for the 2001 plan year on August 6, 2002. The administrator failed to properly extend the filing due date of July 31, 2002. Under the DFVC Program, the applicable penalty amount would be $60 (6 days x $10). Example 2 - Assume the same facts as in Example 1, except that the filer filed the annual report on March 31, 2003. Under the DFVC Program, the applicable penalty amount is $2,000 (though the penalty amount calculated at $10 per day would be $2,430 for 243 days, the per-filing cap of $2000 applies). Example 3 - Assume the same facts as in Example 2, except that the filer filed annual reports for the same plan for the 1999, 2000 and 2001 plan years on March 31, 2003. Under the DFVC Program, the applicable penalty amount is $4,000, which is the per-plan filing cap for large plans. Example 4 - Assume the same facts as in Example 3, except that the filer is also submitting an additional plan year 2001 filing under the DFVC Program for another plan. Under the DFVC Program, the penalty amount is $6,000 ($4,000 applicable to the three filings discussed in Example 3, plus $2,000 for the Form 5500 filed for the other plan).   A plan administrator for a plan is delinquent on Form 5500 filings for multiple years. If during that period, the plan’s classification has shifted between being a large and small plan, which penalty cap applies to the plan’s DFVC Program submission? If, during the years of non-filing, there is at least one year where the plan is a large plan, for purposes of the DFVC Program the plan must use the large plan penalty amounts of $10 per day up to a maximum of $2,000 per filing, not to exceed $4,000 per plan.   Is there a different per-plan penalty cap that applies to administrators of small plans sponsored by Internal Revenue Code (Code) section 501(c)(3) organizations (including Code section 403(b) small plans)? Yes. In the case of a small plan sponsored by a Code section 501(c)(3) organization (including a Code section 403(b) small plan), the applicable penalty amount is $10 per day for each day the annual report is filed after the date on which the annual report was due (without regard to any extensions), not to exceed $750 regardless of the number of delinquent annual reports for the plan submitted as part of the same DFVC submission. This per-plan penalty cap, however, will not be available if, as of the date the plan files under the DFVC Program, there is a delinquent or late annual report due for a plan year during which the plan was a large plan. Small plan filings that are eligible for this special per-plan penalty cap must bear the notation 501(c)(3) Plan in the upper-right corner of the first page of the Form 5500 that is submitted to the DFVC Program in Atlanta, Georgia. This notation should not be included in the filing made with EBSA in Lawrence, Kansas.   Are extensions considered when calculating penalties under the DFVC Program? No. All penalties under the DFVC Program are calculated at $10 per day, beginning on the day after the date the filing was due, without regard to any extensions.   Does a plan administrator waive any rights upon filing under the DFVC Program? Yes. Payment of the penalty amount under the terms of the DFVC Program constitutes, with regard to the filings submitted under the Program, a waiver of the right both to receive notice of the assessment from the Department and to contest the Department’s assessment of the DFVC Program penalty amount.   If a filing has been made under the DFVC Program, will the plan administrator be liable for any other Department of Labor annual reporting civil penalties? Annual reports that are filed under the DFVC Program are subject to the usual edit checks. Plan administrators will have an opportunity to correct deficiencies in accordance with the procedures described in 29 CFR § 2560.502c-2. The failure to correct deficiencies in accordance with these procedures may result in the assessment of further deficient filer penalties.   Can plan assets be used to pay the civil penalties assessed under ERISA § 502(c)(2)? No. The plan administrator is personally liable for the payment of civil penalties assessed under ERISA § 502(c)(2). Therefore, civil penalties, including penalties paid under the DFVC Program, may not be paid from the assets of an employee benefit plan.   May an administrator of an apprenticeship and training plan, as described in 29 CFR § 2520.104-22, or an administrator of a top hat plan, as described in 29 CFR § 2520.104-23, participate in the DFVC Program? Yes. Administrators of apprenticeship and training plans and administrators of pension plans for a select group of management or highly compensated employees (top hat plans), may file the applicable notice and statement described in regulation §§ 2520.104-22 and 2520.104-23, respectively, under the DFVC Program in lieu of filing any past due annual reports. By properly filing these statements and meeting the other applicable DFVC Program requirements, administrators will be considered as having elected compliance with the exemption and/or alternative method of compliance prescribed in §§ 2520.104-22, or 2520.104-23, as appropriate, for all subsequent plan years.   How does an administrator of an apprenticeship and training plan participate in the DFVC Program? The plan administrator must prepare the statement described in regulation section 29 CFR §2520.104-22 and file it at the following address: U.S. Department of Labor Employee Benefits Security Administration Apprenticeship and Training Plan Exemption 200 Constitution Avenue, NW, Suite N-1513 Washington, DC 20210 The plan administrator must also complete the most current Form 5500 Annual Return/Report (without schedules or attachments), items 1a–1b, 2a–2c, 3a–3c, and use plan number 999 for all apprenticeship and training plans. The paper copy of the form must be signed and dated, and be accompanied by a check for $750 made payable to the U.S. Department of Labor, and sent to: DFVC Program Employee Benefits Security Administration P.O. Box 530292 Atlanta, Georgia 30353-0292 The applicable $750 penalty amount is for each DFVC submission, without regard to the number of plans maintained by the same plan sponsor for which the notices and statements are being filed or the number of participants covered by the plan or plans.   How does an administrator of a top-hat plan participate in the DFVC Program? The plan administrator must prepare the statement described in regulation section 29 CFR § 2520.104-23 and file it at the following address: U.S. Department of Labor Employee Benefits Security Administration Top Hat Plan Exemption 200 Constitution Avenue, NW, Suite N-1513 Washington, DC 20210 Note: A plan sponsor maintaining more than one top hat plan is not required to file a separate statement for each such plan. See 29 CFR § 2520.104-23. The plan administrator must also complete the most current Form 5500 Annual Return/Report (without schedules or attachments), items 1a–1b, 2a–2c, 3a–3c, and use plan number 888 for all top hat plans. The paper copy of the form must be signed and dated, and be accompanied by a check for $750 made payable to the U.S. Department of Labor, and sent to: DFVC Program Employee Benefits Security Administration P.O. Box 530292 Atlanta, Georgia 30353-0292 The applicable $750 penalty amount is for each DFVC submission, without regard to the number of plans maintained by the same plan sponsor for which the notices and statements are being filed or the number of participants covered by the plan or plans. Is there a requirement to write DFVC Program in red ink on the top of the Form 5500 being filed? No. Unlike the 1995 DFVC Program, the forms and penalty payment no longer have to be annotated in bold red print identifying the filing as a DFVC filing. In fact, notations inserted in the margins or borders of 1999 or later year Form5500s may adversely affect the processing of the form and require a substitute filing. Filers using the 2001 or subsequent version of the Form 5500 to participate in the DFVC Program should check box D of the Form 5500 and attach the required statement to the Form 5500 filed with EFAST (see the Form 5500 instructions). Filers of Forms 5500 under the DFVC Program for small plans sponsored by 501(c)(3) organizations (including Code section 403(b) plans) must make the notation 501(c)(3) Plan in the upper right-hand corner of the first page of the Form 5500 that is being submitted to the DFVC Program in Atlanta, Georgia. The notation is not required to be in red ink.   Does the DFVC Program only apply to plan years beginning on or after January 1, 1988? A plan administrator is required to file an annual report for an employee benefit plan beginning with the 1975 plan year. However, during the DFVC Program, the Department is targeting all plan years beginning on or after January 1, 1988 -- the effective date of ERISA § 502(c)(2).   Is the DFVC Program applicable to filings made by direct filing entities (DFEs) (i.e., master trusts, pooled separate accounts, common/collective trusts, 103-12 IEs, and group insurance arrangements)? The DFVC Program is not applicable to DFE filings made for master trusts, pooled separate accounts, common/collective trusts and 103-12 IEs. The Form 5500 filed by these DFEs is an integral part of the annual report of the participating employee benefit plans. If a Form 5500 was timely filed for the participating employee benefit plans, a failure to timely file a DFE Form 5500 for these entities may cause the plan’s annual report to be incomplete or inaccurate, but it does not result in the plan being a late or non-filer. The plan’s Form 5500, however, may be subject to rejection for being incomplete or inaccurate, and, if rejected, a plan administrator who failed to correct the problem would be subject to penalty assessments by the Department. A Form 5500 filed for a group insurance arrangement (GIA) under the Department’s regulations relieves the plan administrators of the individual plans participating in the GIA from the requirement to file a separate Form 5500 for each plan. The Department will allow a GIA that failed to file a GIA Form 5500 on time to use the DFVC Program to correct the late filing. GIAs participating in the DFVC Program are subject to the conditions applicable to large plan filers.   If a plan administrator participated in the DFVC Program prior to the effective date of the revised Program, and paid the then applicable program penalties, may the administrator obtain a refund for the difference between the previous and the current penalty applicable amounts? No. By filing under the prior DFVC Program, the plan administrator paid the reduced penalties and received the relief with respect to which the paid penalty related. The primary protection the plan administrator received was, and continues to be, relief from possible assessment of higher late filer or non-filer penalties. While the DFVC penalty amounts have changed, the plan administrator continues to have the relief that was originally provided under the DFVC Program.   Prior to participating in the DFVC Program, a plan administrator was notified in writing by the Department that its plan’s filings are delinquent. Can the plan administrator participate in the DFVC Program? No. The DFVC Program is only available to a plan administrator that complies with the requirements of the Program before 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 ERISA.   Is it possible to obtain a waiver from the applicable penalty amount under the DFVC Program if the plan administrator can demonstrate that there is reasonable cause why the penalty should not be assessed? No. Payment of a penalty under the terms of the DFVC Program constitutes a waiver of an administrator’s right both to receive a notice of assessment from the Department and to contest the Department’s assessment of the penalty amount. If the plan administrator chooses not to waive these rights, the plan administrator must file with EFAST in Lawrence, Kansas in the regular manner and not pursuant to the DFVC Program.   Does participation in the DFVC Program protect the plan administrator from other civil penalties that may be assessed by the Internal Revenue Service (IRS) or the Pension Benefit Guaranty Corporation (PBGC) for failing to timely file a Form 5500 Annual Return/Report? Both the IRS and PBGC have agreed to provide certain penalty relief under the Code and Title IV of ERISA for delinquent Form 5500s filed for Title I plans where the conditions of the DFVC Program have been satisfied. See sections 5.02 and 5.03 of the DFVC Program Federal Register Notice and IRS Notice 2002-23.   How can a plan administrator obtain Form 5500 Series forms? Forms may be obtained from the IRS by calling 1.800.TAX-FORM (1.800.829.3676). Forms for certain pre-1999 plan years are also available through the Internet sites for EBSA and the IRS. For further information on EFAST filing requirements, see the EFAST Web site and the instructions for the most current Form 5500.