There are few things more maddening, more viscerally frustrating, than watching a plan sponsor or service provider steer themselves into the abyss out of sheer pride or ignorance—or worse, some toxic blend of both. But in the twilight centuries of the 5500s, nothing tested my patience quite like the decision not to use the DFVCP.
Let me be clear: the Department of Labor’s Delinquent Filer Voluntary Compliance Program (DFVCP) is a gift. A golden parachute for those who stumble, an amnesty for the well-intentioned but disorganized. It’s not just a program—it’s a lifeline. And yet, somehow, year after year, I would encounter plan sponsors—employers, trustees, alleged fiduciaries—who chose not to grab hold.
You’d sit across from them, the ink on the late Form 5500s still drying, and you’d explain it calmly, like you’re talking to someone dangling from a ledge. “You’re late. You’ve missed a required filing. But if you act now, if you enter the DFVCP voluntarily, the penalty is capped. You control the narrative. You retain dignity.”
And still, the response: “Let’s wait. Let’s see if the DOL notices.”
The DOL always notices.
It was maddening because it wasn’t just about money, though the penalties outside DFVCP could be catastrophic. It was about mindset. The DFVCP was built on a principle I respect deeply—redemption. A structured way to admit a mistake, make amends, and move forward without getting devoured by the very system designed to ensure compliance.
But so many couldn’t see it. Maybe they’d been taught that compliance was an adversarial game, that if you admitted fault you invited disaster. Maybe they were emboldened by years of evasion. Or maybe, and this is the one that made me want to scream into my coffee mug, they just didn’t want to pay anything.
So they’d roll the dice. Ignore my counsel. Decline DFVCP. And inevitably, months later, I’d get the call, their voice hushed and panicked:
“We just got a letter from the DOL.”
And I’d take a breath. Not to stay calm—I was calm. But to keep from saying, “I told you so.”
You don’t get points for pride in ERISA. You get penalties.
In those late years, as the industry automated and compliance tools became smarter, I often wondered why we still needed to have this conversation. Why, even with the ghosts of civil penalties looming large, people still believed they could outmaneuver time and regulation.
But then again, maybe that’s the curse of my profession—the long war between logic and hubris.
And in that war, the DFVCP was one of our few truces.
Refusing it? That was the madness.
