It Just Got Easier to Fix Your Ailing Retirement Plan

Explore:  EPCRS IRS Retirement Plan

Properly maintaining and administering a retirement plan is a difficult task for most employers. Despite even extreme vigilance, things often go wrong. The list of potential plan errors is endless, and plan sponsors face very hefty penalties if those errors are discovered during an IRS audit. The good news is that plan sponsors may avoid those penalties by voluntarily correcting errors through the Employee Plans Compliance Resolution System (EPCRS). And, even better, EPCRS just got broader, easier, and cheaper.

  • Broader: EPCRS was recently broadened for non-profit and governmental employers that sponsor Code Section 403(b) plans. Sponsors of these plans may now correct a broader range of errors, including, for the first time, errors relating to the timing of amendments. Additionally, EPCRS has been expanded on a trial basis for governmental entities that sponsor Code Section 457(b) plans.
  • Easier: The new iteration of EPCRS provides additional correction options and examples, clarifies the requirements for certain corrections, and overhauls the old submission forms. All of these improvements make it easier to determine the appropriate correction and will reduce the time required to complete a submission.
  • Cheaper: Some errors, such as missing the deadline to adopt an amendment, require the plan sponsor to pay a fee to correct the error. The updated EPCRS lowers the fee for certain corrections, and, most notably, provides a temporary 50% fee reduction for Code Section 403(b) plans that were not updated in 2009 to reflect new regulations. Sponsors of these Code Section 403(b) plans must file an EPCRS submission by December 31, 2013 to take advantage of the reduced fee.

Correcting plan errors through EPCRS normally will be much cheaper than paying the penalty assessed for errors discovered during an IRS audit. Therefore, it is in an employer’s best interest to carefully and routinely monitor its plan for errors and, when errors are discovered, to promptly correct those errors through the new and improved EPCRS.

Written by:

Published In:


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Poyner Spruill LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.