The IRS recently published Rev. Proc. 2019-19, which sets forth the most current consolidated statement of the correction programs under the IRS’s Employee Plans Compliance Resolution System (“EPCRS”). Pursuant to the new guidance, which became effective April 19, 2019, eligible plan sponsors may use the self-correction program (“SCP”) component of EPCRS to correct certain failures that were previously only correctable under the voluntary correction program (“VCP”) or Audit CAP components of EPCRS. Unlike VCP and Audit CAP, SCP does not require any filings or payments to the IRS. The amended SCP now includes procedures for correcting certain plan document failures and for correcting certain participant loan failures (including defaulted plan loans). Rev. Proc. 2019-19 also expands the circumstances under which certain operational failures may be corrected by plan amendment under SCP. View Rev. Proc. 2019-19. View a summary of the key changes to the SCP component of EPCRS.
On September 29, 2016, the IRS released Rev. Proc. 2016-51, which sets forth the comprehensive Employee Plans Compliance Resolution System (“EPCRS“) and supersedes Rev. Proc. 2013-12 (i.e., the most recent comprehensive statement of EPCRS). The modifications to EPCRS made by Rev. Proc. 2016-51 were primarily ministerial (e.g., making certain changes in response to modifications made to the IRS’s determination letter program). One noteworthy change, which will become effective January 1, 2017, is that the IRS will no longer refund 50% of the user fee in connection with anonymous voluntary correction program submissions for which an agreement cannot be reached. View Rev. Proc. 2016-51.
The IRS recently published two revenue procedures, which make various modifications and clarifications to the Employee Plans Compliance Resolution System (“EPCRS“), as set forth in Rev. Proc. 2013-12. Of particular note under Rev. Proc. 2015-27 (released on March 27) is a clarification that, with respect to certain plan overpayments, a plan sponsor is not necessarily required to attempt to recoup overpayments directly from participants and beneficiaries. Rev. Proc. 2015-27 also reduced the Voluntary Correction Program fees required for certain participant loan failures. The second revenue procedure, Rev. Proc. 2015-28 (released on April 2), provides new safe harbor correction methods for employee elective deferral failures under 401(k) and 403(b) plans (including plans that have automatic contribution features). Pursuant to these safe harbors, the qualified nonelective contributions that were previously required under EPCRS to correct elective deferral failures may be reduced or eliminated if the failures are corrected within a specified period… Continue Reading
The Internal Revenue Service (the “IRS”) recently updated the retirement plan “Fix-It” guides (the “Guides”) published on its website. The Guides provide tips on how to identify, correct, and avoid common mistakes in retirement plans. There are separate Guides for each of the following types of retirement plans: 401(k), 403(b), SEPs, SIMPLEs, and SARSEPs. E ach guide provides (i) an overview of the rules for each type of plan and the Employee Plans Compliance Resolution System, (ii) a description of the most frequent errors found by the IRS for each type of plan, and (iii) guidance on how to find, fix, and avoid the most common errors. Copies of the Guides are available here.