Operational errors that relate to failure to comply with the terms of a plan that are correctly drafted originally may be eligible for self-correction under EPCRS.
Correcting a prior year's exclusive benefit rule violation or operational failure must be done in accordance with EPCRS and may require a retroactive amendment and IRS approval.
A 403(b) plan sponsor may use the Voluntary Correction Program (VCP) under EPCRS
to correct a failure to timely adopt a written 403(b) plan document.
is made up of three distinct correction programs: the Self-Correction Program (SCP), the Voluntary Correction Program with Service Approval (VCP) and the Correction on Audit Program (Audit CAP).
brings needed clarity to the self-correction process and provides for more reasonable sanctions.
2006-27, (46) the last update of EPCRS
, specifically stated that the method for correcting the failure to include an otherwise eligible employee in a 401(k) plan did not apply to a plan that allowed participants to make designated Roth contributions.
98-22 and the administration of EPCRS
and specifically requests (1) comments regarding the extent to which a fixed (as opposed to an indefinite) self-correction period encourages prompt, voluntary correction and (2) suggestions for items that should be included in forthcoming guidance on permissible correction methods.
2006-27 revised some of the EPCRS
principles and added several new remedies for common plan qualification failures.
She has handled a wide range of qualified and nonqualified employee benefit plan and executive compensation issues, including IRS section 401, 403(b) and 457 plans, ESOPs, corrections under the EPCRS
and VFC programs, plan compliance and bankruptcy matters as well as plan design and development.
PPA '06 Section 1101 calls for continuous improvement of the EPCRS
program, with an emphasis on making it better understood and more favorable to small employers, reducing the need for Service approval of plan corrections, allowing more failures to be corrected voluntarily during audit and assuring overall fairness.
includes the Self-Correction Program (SCP), the Voluntary Correction Program (VCP) and the Audit Closing Agreement Program (Audit CAP).
The Self-Correction Procedure (SCP), a program under the EPCRS
, permits plan sponsors to correct eligible operational failures without the Service's approval and without the payment of any compliance fee or dollar sanction.