Total Articles: 2
IRS Clarifies When Plan Amendments May be Used to Correct Operational Failures.
The Internal Revenue Service (IRS) recently explained when a plan amendment can be used to correct a failure to follow plan terms in the operation of a retirement plan. (See Retirement News for Employers, Winter 2008). The Employee Plans Compliance Resolution System (EPCRS) is a voluntary correction program that allows plan sponsors to correct plan mistakes that, if left uncorrected, could result in a retirement plan losing its favorable tax treatment. The EPCRS includes a Self-Correction Program (SCP), under which a correction can be made without paying a fee or contacting the IRS. However, SCP is only available to correct a failure to follow the terms of the plan in its operation (operational failure).
Internal Revenue Service and Department of Labor Update Correction Programs (pdf).
Both the Internal Revenue Service (IRS) and the
Department of Labor (DOL) have recently announced
several positive changes to their voluntary correction
programs for retirement plans. On May 5, 2006, the IRS
released Revenue Procedure 2006-27, which updates
and expands its correction program, known as the
Employee Plans Compliance
Resolution System (EPCRS).
On April 19, 2006, the DOL
published an update to its
correction program, known
as the Voluntary Fiduciary
Correction Program (the 2006
VFC Program).
