IRS 401(k) Compliance Questionnaires Issued

On May 17, the Internal Revenue Service (IRS) initiated a 401(k) compliance review by sending questionnaires to 1,200 plan sponsors.¹ This is the first time that the IRS has undertaken such an initiative. In light of the popularity of 401(k) plans and their increased significance in retirement planning for the U.S. workforce, the IRS wishes to ensure that these plans are being operated properly. The IRS intends to use the information gathered from the compliance questionnaires to gauge plan compliance and to gain a better understanding of how to address any noncompliance trends.

The IRS selected the plans that will receive the questionnaire randomly, based on IRS Form 5500 and census data. We understand that plan sponsors that are currently under audit have been excluded from the process.