File Every ERISA Plan's Form 5500 History Before a Vendor Gap Becomes a Per-Day Penalty

The Signal

A company with a 401(k) plan and forty employees switches payroll providers mid-year. The old provider stops sending plan data; the new one assumes someone else is handling the ERISA filing. Nobody files Form 5500 that year. Nobody notices for two years, because nothing breaks — the plan keeps running, employees keep contributing, statements keep going out. Then a routine DOL data match flags the gap, and the letter that shows up isn't a reminder. It's a penalty notice calculated per day, per missed filing, going back to the year the filing stopped.

Why this matters now

Form 5500 is the annual report every ERISA-covered retirement and most welfare benefit plans must file, and it's due the last day of the seventh month after the plan year ends — July 31 for a calendar-year plan, with a possible extension on Form 5558. The filing isn't optional paperwork; it's how the DOL and IRS confirm a plan is funded, administered, and reported the way the law requires. When a plan sponsor changes payroll providers, TPAs, or internal HR ownership, the filing is exactly the kind of recurring, non-urgent task that falls into the gap between old-vendor-stopped and new-vendor-started. Nothing about running the plan day-to-day signals that the filing was missed, which is why sponsors routinely find out from a government letter instead of their own process.

The mistake to avoid

The mistake is assuming payroll continuity means compliance continuity. A plan administrator can keep collecting contributions, sending statements, and running the plan correctly in every operational sense while still missing the annual report that's legally required on top of all that. The filing obligation sits with the employer or plan administrator — not automatically with whatever TPA or recordkeeper happens to be holding the data that year — and a vendor transition is a common point where ownership of that specific task gets dropped without anyone deciding to drop it.

The DFVC gap check

Pull the plan's EFAST2 filing history for the last five plan years and lay it against the actual due dates, including any extensions filed on Form 5558. For a calendar-year plan, that's five entries, each with a clear filed-or-not-filed status. Any gap — a missed year, a late filing with no extension on record, a filing under the wrong plan name after a merger or name change — is the exposure, and it compounds the longer it sits unaddressed because statutory penalties for a late or missing Form 5500 accrue on a per-day basis under both ERISA and the Internal Revenue Code. The DOL's Delinquent Filer Voluntary Compliance Program exists specifically to let a sponsor self-correct a gap at a capped, pre-set penalty instead of waiting for the per-day number to run on a government timeline, and the IRS has separate penalty relief for sponsors who complete the DFVC process. Both routes require the sponsor to come forward before the DOL or IRS opens an inquiry — correction after a penalty notice already closes the door on the capped-fee path.

What stays protected

A filing gap is not a reason to touch the plan itself. The retirement or welfare benefits already administered, the contributions already made, and the employees already covered don't need to be unwound, re-explained, or flagged to the workforce while this gets fixed. This is a reporting-obligation correction between the sponsor, the DOL, and the IRS — not a plan-design problem, and not something that needs to disrupt payroll, HR communication, or the plan's day-to-day operation while the filing history gets reconciled.

The first move

Pull the EFAST2 filing history for every ERISA plan the company sponsors, plan year by plan year, for as far back as records go. Mark each year filed, late, or missing, and check every Form 5558 extension against the filing it was supposed to cover.

The move this week

If every year checks out clean, file the check itself with whoever owns the plan and move on — that's a closed loop, not a project. If there's a gap, don't file a late catch-up return on your own before finding out whether DFVC eligibility is still open for that year; filing outside the program after a gap is found can forfeit the capped penalty and leave the per-day exposure in place.