This spring, the IRS expanded the self-correction program (SCP) under the Employee Plans Compliance Resolution System (EPCRS). The expansion brings about a welcome change for plan sponsors, as the prior alternative—the Voluntary Correction Program—required the IRS be notified, fees to a be assessed, and approval to be granted for the correction.
As background, the SCP is available to correct insignificant operational failures within retirement plans and, if certain requirements are met, more significant operational and plan document failures as well.
The SCP generally allows plan sponsors to make and document certain specific corrections internally without notifying the IRS or seeking prior approval. This recent expansion permits self-correction of specified loan failures, certain plan document failures, and operational failures by retroactive plan amendment when specific requirements are met.
What Do Plan Sponsors Need to Do?
While we won’t go into additional detail in this summary, the bottom line is there’s no immediate action needed from plan sponsors. The most important thing to note is that there are procedures in place for plan sponsors when there are plan issues that need to be corrected.
For more information on the SCP and the implications for your organization’s retirement plan, please reach out to Curi Capital’s Retirement Plan Solutions team at 984-202-2800.