Earlier this year, the Internal Revenue Service's (IRS)
updated Employee Plans Compliance Resolution System (EPCRS) went
into effect. EPCRS provides several procedures under which
employers sponsoring retirement plans, e.g., 401(k) plans and
403(b) plans, can correct errors in their retirement plans. Some
errors may be corrected without formal submission to the IRS, while
others may require formal application and payment of a compliance
fee or payment of a negotiated sanction amount. The IRS will not
disqualify a retirement plan for an error that is corrected in
accordance with EPCRS.
The updated EPCRS provides employers the opportunity to fix
incomplete or inaccurate 403(b) plan documents (known as "Plan
Document" failures) by making a voluntary submission to the
IRS. If the submission is made on or before December
31, employers may pay a significantly
reduced compliance fee.
