Is Your Benefit Plan Missing an Audit Report?

Since the October 15 deadline has passed, the U.S. Department of Labor (“DOL”) has identified more than 3,200 Form 5500s that were filed without the required audit report. 

The DOL has sent emails to those plan administrators stating they believe an audit report needs to be filed. The DOL is requesting a response, and if they do not receive an amended filing with the audit report, they will send a formal Notice of Rejection (“NOR”) that states the plan administrator has 45 days to comply (i.e., file an amended Form 5500 with the audit report).   

If the plan administrator cannot comply within the 45 days, we recommend plan administrators, after consulting with their ERISA counsel, respond to the DOL. According to the DOL, the primary reason plan administrators open themselves to compliance risk is that they do not pay attention to the correspondence. 

When a plan sponsor files a Form 5500 without the required audit report, the DOL sends the following:

1. An inquiry email.
2. Notice of Rejection ("NOR") letter – Plan sponsors have 45 days to come into compliance. If not, a proposed penalty letter is sent.
3. Notice of Intent (“NOI”) to Assess a Penalty – Plan sponsors have 30 days to respond. This is an opportunity to respond with a reasonable cause explanation as to why a penalty should not be assessed. If no response is received, a final order is sent.
4. Notice of Determination (“NOD”) – This indicates if the DOL will abate the penalty fully, partially, or not at all and outline how much is owed. A response is required within 30 days. If the DOL does not receive a timely response, the plan sponsor waives the right to an administrative appeal and the penalty goes to collections.

If you or your company has received an email from the DOL regarding a missing report, we encourage you to consult with your ERISA counsel and reach out to your auditor as soon as possible to obtain the audit report and submit it to the DOL.