The Secure 2.0 Act of 2022, enacted on December 29, 2022,
expanded the ability of plan sponsors to self-correct retirement
plan errors without IRS approval. Congress desired to make it
easier for plan sponsors to correct retirement plan compliance
errors to increase administrative efficiency and to encourage
employers to sponsor plans. Previously, certain failures such as
plan document, loan, eligibility and demographic failures generally
were not eligible for self-correction under the IRS Employee Plans
Compliance Resolution System ("EPCRS"). The legislation
requires the IRS to revise its written EPCRS procedures within two
years to allow for self-correction of any "eligible
inadvertent failure" which is broadly defined as any
operational, document or demographic failure that violates IRS
qualification requirements and occurs notwithstanding established
practices and procedures supporting compliance.
