How Can We Help?

Failure to file timely can result in significant DOL and IRS fees and penalties.

• Internal Revenue Service: $250 per day, not to exceed $150,000
• Department of Labor: Up to$2,259 for 2021 (subject to annual DOL adjustments) for each day the form is late with no overall maximum

The IRS will receive your filing, but the DOL will send a Notice of Rejection (NOR), usually within a few weeks of submission. This notice informs the plan sponsor that the submission is “delinquent” and that the DOL will issue penalties if it is not corrected timely. The plan sponsor has 30 days from the date of the letter to respond. The plan sponsor can respond to the NOR, explain the circumstances of what is going on, and request an extension. Only during the NOR process can you request an extension and have a chance of avoiding a penalty. Please note Schedule H, line 3 specifically asks for information regarding the plan’s independent auditor’s report. If you do not submit the required independent auditor’s report, these questions must still be answered correctly. If you have to file Form 5500 without the required independent auditor’s report, correct that error as soon as possible.

An audit is required for large plan filers and may be deferred but not eliminated for plan years of seven (7) months or less (due to initial year of the plan, merger, or change of plan year). The short plan year does not eliminate the audit requirement; it only defers the audit requirement until the following year. In the year in which the audit will be required, the audit will cover the full plan year and the short period. Additionally, Form 5500 must still be filed for the short plan year.

For those plans which do not fall under the notable exception (80/120 rule) and are considered a "large plan filer," Scheduled H must be completed in addition to any other applicable schedules and attachments. Slavic401k will prepare a complete signature-ready Form 5500 for you to file with the EBSA. An independent audit must be attached to the completed Form 5500 before it is electronically filed. The plan sponsor is responsible for engaging the author to prepare the independent audit. To avoid penalties for failing to complete the Form 5500 or ramifications of filing late, plan sponsors should take the time to understand the requirements for a retirement plan audit well in advance of the filing deadline.

A plan participant is any employee eligible to participate in an employer's retirement plan when certain eligibility conditions stated in the plan document are met. A participant is also an employee or former employee (terminated employee) of an employer who is or may become eligible to receive a benefit from an employee benefit plan. The number of participants at the beginning of the year determines which 5500 form must be filed.

A plan with fewer than 100 participants (on the first day of the plan year) that meets all of the eligibility conditions is considered a "small plan" filer and can file Form 5500-SF. A plan with more than 100 participants (on the first day of the plan year) is considered a "large plan" filer and must file Form 5500 and complete all applicable schedules and attachments. NOTE: Pooled Employer Plans (PEPs) can only file the Form 5500 and are restricted from filing Form 5500-SF.

Form 5500 Annual Return/Report is due the last day of the seventh month after the plan year ends (July 31 for a calendar year plan), with an additional 2 ½ months extension if Form 5558 Application for Extension of Time to File has been submitted (October 15th with an extension). Slavic401k will file the Form 5558 Application for Extension of Time to File on your behalf if an extension is needed.

Annual recurring plan fees are deducted from participant accounts on a quarterly basis. Specific amounts vary from plan to plan. These fees may cover the plan's administrative expenses and service provider fees including IRS 5500 filings, record-keeping, accounting, legal, customer service and contribution processing. They are categorized as the following: fixed admin fee, asset based fees, and activity fees.

To calculate how much your contributions will affect your take home pay, you can start by multiplying your pay period income by your contribution rate to know how much money will be contributed to your 401(k) account each pay period. For example, if your gross pay (the amount before any taxes or benefits deductions) is $1,000 and you contribute 10%, $100 is deducted from your pre-tax paycheck and deposited into your 401(k) account. The $100 contribution to your 401(k) is deducted from your paycheck pre-tax, so the impact on your take home pay will be less than $100 as those funds are not taxable by the government.

Your first contribution depends on the following:

• Meeting eligibility requirements
• The plan entry requirements (Quarterly, Monthly, Immediate)
• Completed enrollment form
• Payroll processing time