News & Information

 

FEATURED PRODUCT

Pension and Employee Benefits: Code, ERISA, & Regulations
This series provides an authoritative and comprehensive reference to the full text of benefits-related provisions of the Internal Revenue Code, the full text of ERISA, and related proposed and final regulations, as well as the official IRS and DOL preambles, and Committee Reports.

Learn More »

CCH® PENSION — 02/22/11

VCP Fee Discount For Some Pre-Approved Non-Amenders Ends May 2, 2011

from Spencer’s Benefits Reports: Plan sponsors that failed to adopt an EGTRRA restatement plan by the April 30, 2010, deadline have until May 2, 2011, to correct their plan failure under the Voluntary Correction Program (VCP), according to the Internal Revenue Service in the Feb. 11, 2011, Employee Plan News. This particular VCP process applies to plan sponsors using pre-approved 401(k), profit-sharing, money purchase or other defined contribution documents.

A $750 fee must be paid in order to use VCP for such a process. However, for plans amending under EGTRRA, a discounted fee of $375 (50% of the usual fee) will be payable as long as three criteria are met:

(1) The VCP application must be postmarked on or before May 2, 2011.
(2) The plan must have 20 or fewer participants.
(3) There must be no other plan qualification failures.

(Since the actual deadline of April 30, 2011 [one year after the missed deadline] occurs on a Saturday, the IRS has extended the deadline to Monday, May 2, 2011.)

Those plans that miss the May 2, 2011, deadline, have 21 or more participants, or have other plan qualification failures will have to pay the full $750 application fee. The IRS notes that the VCP Submission Kit details the necessary requirements.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

Visit our News Library to read more news stories.