Certified Plan Sponsor Professional (CPSP) Practice Exam

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You discover that your employer failed to file the prior year's Form 5500 for its 401(k) plan. Which corrections program would be appropriate for correcting this plan error?

Delinquent Filer Voluntary Compliance Program (DFVC)
Self-Correction Program (SCP)
Voluntary Correction Program (VCP)
Mandatory Filing Compliance Program (MFCP)

The correct answer is: Delinquent Filer Voluntary Compliance Program (DFVC)

The Delinquent Filer Voluntary Compliance Program (DFVC) is specifically designed for situations where employers have failed to file the required Form 5500 on time for their employee benefit plans, including 401(k) plans. This program allows plan sponsors to correct their filings without facing substantial penalties. By participating in the DFVC, the employer can submit the overdue Form 5500 and receive a reduced penalty fee, as long as they adhere to the program's guidelines. The other options are not applicable in this scenario. The Self-Correction Program (SCP) typically relates to operational errors in plan administration rather than filing issues. The Voluntary Correction Program (VCP) does offer avenues for correcting a wide range of plan errors, but it is not specifically aimed at addressing delinquent filing of Form 5500. Lastly, the Mandatory Filing Compliance Program (MFCP) is not tailored for voluntary compliance; it refers to situations mandated by regulation without the flexibility provided by the DFVC for delinquent filings. Thus, DFVC is the correct avenue for addressing the failure to file the prior year's Form 5500.