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CCH® PENSION — 04/19/11

Some 403(b) plan errors ineligible for VCP, IRS advises

In its Employee Plans News, the IRS has noted that recently it has received several Voluntary Correction Program (VCP) submissions for 403(b) retirement plan failures that are currently ineligible for correction through VCP.

Ineligible submissions include cases where:

• the plan's written program did not satisfy the legal requirements under Code Sec. 403(b) and the related final regulations, or the plan failed to adopt a written plan program before December 31, 2009; or
• the plan failed to operate according to its written program's terms.

The IRS advises that it will return all VCP submissions (including fees) containing ineligible failures. An employer sponsoring a 403(b) plan may currently use VCP to correct employer eligibility and demographic failures, and the operational failures listed in Section 5.02(2)(a) of IRS Rev. Proc. 2008-50.

The IRS said that it is in the process of updating Rev. Proc. 2008-50 to expand EPCRS to include post-December 31, 2008 failures.

Source: IRS Employee Plans News, Issue 2011-4, March 23, 2011.

For more information, visit http://www.wolterskluwerlb.com/rbcs.

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

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