403(b) Plan Relief Available
As mentioned in last month’s Benefit Beat, IRS Revenue Procedure 2013-12 updated the IRS’ Employee Plans Compliance Resolution System (EPCRS) for correcting plan errors. Of particular note, this Revenue Procedure addresses voluntary correction possibilities available to 403(b) plans.
Over the last few years, more and more requirements have been imposed on 403(b) plans; see these prior Benefit Beat articles:
One of the significant requirements imposed on 403(b) plans, both those subject to ERISA and those not subject to ERISA, including plans sponsored by churches and public schools, is the requirement that the plan be documented in writing. The voluntary correction program can be used to correct a failure to comply with this requirement.
Generally, Rev Proc 2013-12 is applicable on or after April 1, 2013, which has raised questions for plans under audit prior to that date. The IRS has opined that even if a plan is under audit, the voluntary correction program can be used to correct a failure to maintain a written plan document.
The IRS’s website on Correcting Plan Errors contains tools to assist plan sponsors in correcting 403(b) plan errors, including:
The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.
As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.