DOL Letters on Late Contributions

[austin3515]

I've gotten two letters in two days from the Boston Office regarding late deposits reported on the 5500. The letter specifically says "it appears that the correction was not completed before the date of the filing of this form."

That is false in both cases - the auditors schedule of late deposits disclosed that it was corrected outside of VFCP.

The letter indicates that "prior to commencing any enforcement actions, please let us know if you will be filing under VFCP."

By the way, did I mention that both plans have around $1MM of contributions a year and the late deposits disclosed were WELL below $1,000? One was just barely over $100.

Anyone getting similar letters? I think that when they pulled the query something went wrong and these were sent out in error.

[Belgarath]

We have not (yet). TGIF!!

[Doghouse]

Sounds like they are trying to bully people into VFCP. It must be a cash cow.

[Belgarath]

Personally, I doubt that. I expect it is just an error. Doesn't make it any less of a giant PIA...

[austin3515]

It must be a cash cow

There is no filing fee for the VFCP.

[Flyboyjohn]

The Philadelphia Region launched a similar initiative in April sending letters to 3,000 2014 5500 filers who reported at least $30,000 in late deposits.

We helped several employers make VFCP filings under threat of "full blown" soup-to-nuts DOL investigation if they declined the invitation to file under VFCP.

At least in the Philadelphia region I predict that it will become the norm that all (or substantially all) filings indicating "substantial" ($30,000?) late deposits will end up going through VFCP.

[austin3515]

I'll give em $30,000, but these amounts are way too small!! Must be a mistake!

[Flyboyjohn]

Maybe Boston doesn't have as many scofflaws as Philly so they have to set their sights lower to meet their quota.

If your client is on their radar screenr I recommend they seriously consider filing, especially since its "free" (no user fee) other than your fee for preparing the filing.

[WCC]

I have received 3 within the last month. I work in the western part of the country within the San Francisco DOL region. We have responded each time that we self corrected and provided them with dates. Each time the DOL has sent a response saying the "case has now been closed".

[RatherBeGolfing]

I am assuming (which is never a good thing) that these used the DOL calculator to figure out the lost earnings but did not file VFCP.

I know the Philly office has done this before. Their position is that you are not allowed to use the calculator unless you file VFCP. If you use it and correct outside VFCP, they may not consider it corrected.

They may be trying to bring this issue back up though other regional offices ugh

[austin3515]

WCC, were the amounts similar to what I have described?

[austin3515]

FWIW, I am absolutely telling my clients to file. Fortunately they are both in a position to pay me the $500 or so that I would need to charge to do the filing.

It's an atrocity though that the fees involved here are thousands of times the correction involved (i.e. the interest)

[WCC]

WCC, were the amounts similar to what I have described?

Yes, they were similar to what you described. Relatively small dollars compared to annual contributions.

[austin3515]

I'm a straight-up independent, no political loyalties one way or the other. It's just too damn bad I cant vote republican this cycle because for me this would have been a decisive factor! :wacko:

[Flyboyjohn]

Philly VFCP coordinator says she won't accept the "we already fixed it" letter and is insisting on the full VFCP package.

But now I'm wondering if they have a different letter/approach for the under $30,000 transgressions where they'll accept something less than a full filing.

[RatherBeGolfing]

Im on the DOL committee for ASPPA GAC, I have forwarded this issue to my group to see if is regional and luck of the draw or if it is part of a bigger enforcement initiative.

I will let you guys know what I find out.

J

[austin3515]

Any response?

[RatherBeGolfing]

Any response?

Nothing yet...

[RatherBeGolfing]

So here is a brief update

Yes, this is part of a national initiative, but how it is addressed depends on the regional office.

There is no de minimis amount.

It appears that this could also be connected to an even larger initiative looking into how effective current compliance programs are and how they are used.

J

[austin3515]

It appears that this could also be connected to an even larger initiative looking into how effective current compliance programs are and how they are used

It's just crazy that there is no self correction option, even for small amounts. Frankly I thin there should be a self correction option for deposits that are late by less than a month for example regardless of size. Maybe they will figure that out!

[RatherBeGolfing]

It appears that this could also be connected to an even larger initiative looking into how effective current compliance programs are and how they are used

It's just crazy that there is no self correction option, even for small amounts. Frankly I thin there should be a self correction option for deposits that are late by less than a month for example regardless of size. Maybe they will figure that out!

I agree. To that end, there is a possibility for something good to come out of it since they are collecting data on how people are using the program.

[Doghouse]

There is some mention of this regional EBSA initiative in this article.

http://www.asppa.org/News/Browse-Topics/Details/ArticleID/6889