LATE CONTRIBUTION, 5330, VFCP

[Guest cxs]

A client forgot to contribute a participant catch-up contribution in December of 2003. The auditor found the problem and it was reported on the 2003 5500. It was deposited into the plan, along with lost interest, in October of 2004. A 5330 was never submitted. Now I have a DOL letter recommending applying under the VFCP program to receive a no action letter. I have tried to contact them but have not received a reponse.

My questions:

Could I just file a 5330 now? Would that solve the problem? If so, what year should I file? 2003? 2004?

Is it necessary to go through the VFCP program. It seems there are many risks with the program. Any suggestions on how the application should be organized?

Thank you -

[bzorc]

For what its worth, I had a slightly similar situation where in 2003 a client had late deferrals and had them submitted along with lost earnings. The client received the DOL "invite" letter. We wrote a response to the DOL explaining that the late contributions and earnings were deposited and that future contributions have been submitted timely.

We received a response from the DOL today acknowledging our letter, stating they are not taking a position on whether the correction was performed under the standards set by VFCP, and, interestingly, will not be initiating an investigation regarding the matter "at this time". Finally, they state their letter cannot be relied on as a "no action" letter.

They close with stating thanks for bringing the matter to a prompt resolution. So I guess the moral of the story is that if you write the DOL with your fact situation, they may put off an investigation. Well see....