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ARTICLE · 03 JUNE 2019

DIY: IRS Expands The Self-Correction Program To Allow For Correction Of Certain Operational Errors Via Retroactive Plan Amendment

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While dusting off your 401(k) plan document and giving it a quick checkup, as discussed in one of our recent articles, what happens if you find that the plan's operations do not match the plan document language?

United StatesEmployment and HR
Leigh Riley
Leigh Riley
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While dusting off your 401(k) plan document and giving it a quick checkup, as discussed in one of our recent articles, what happens if you find that the plan's operations do not match the plan document language? Under the IRS correction program, called the Employee Plans Compliance Resolution System (EPCRS), your legal counsel may present you with two options to correct these operational errors:

  1. You can change your operations going forward to match the plan language and take whatever actions are necessary to fully correct the prior error, or
  2. You can change the plan document to match your operations via a retroactive plan amendment (if the retroactive amendment otherwise complies with applicable law), such that the operational error is treated as never having occurred.

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