IRS Updates Retirement Plan Correction Procedure (Part 2)

The IRS has provided significant administrative and monetary relief for plans correcting errors involving employee contributions. The changes to the IRS's Employee Plans Compliance Resolutions System (EPCRS) are set forth in Revenue Procedure 2015-28 and are summarized as follows:

• Automatic Contribution Arrangements. If a plan fails to implement an automatic contribution feature or fails to implement an affirmative election of an eligible employee subject to such feature and the error does not go beyond the nine and one-half month period after the end of the plan year of the failure, no corrective contribution for missed elective deferrals is required, provided certain conditions are met. First, correct deferrals must begin no later than the earlier of (i) the first paycheck on or after the last day of the nine and one-half month period after the end of the plan year in which the failure first occurred, or, (ii) if the employer was notified of the failure by the