Mistakes in benefit plans 

can – and do – happen. 

These Federal agencies have programs ready to help: 

y Internal Revenue Service y U.S. Department of Labor 

Read on to learn more
 

For More Information 

IRS, TAX EXEMPT AND GOVERNMENT ENTITIES, 

EMPLOYEE PLANS 

For information on the Employee Plans Compliance Resolution 

System, visit www.irs.gov/ep and click on “Correcting Plan Errors” 

under “Retirement Plans Community Topics.” Subscribe to the 

IRS’s free retirement plan newsletters, Employee Plans News and 

Retirement News for Employers, at www.irs.gov/ep. 

U.S. Department of Labor, 


Employee Benefits Security Administration
 

Visit www.dol.gov/ebsa for fact sheets on the agency’s two 

self-correction programs, guides to ERISA compliance, calculators, 

and more. Call toll-free 1-866-444-3272 for copies of many of the 

publications featured on the Web site. 

(10-2010)

October 2010 

Retirement Plan Correction Programs 

Minimize the effects of plan errors 

Comply with the law 

Protect participant benefits 
 

 

 

 

 

 

 

 

 

 

 

 

Internal Revenue Service 

Tax Exempt & Government Entities Division Employee Plans 

The IRS system of retirement plan correction programs, the Employee Plans 

Compliance Resolution System (EPCRS), helps plan sponsors of various types 

of qualified retirement plans protect participant benefits and keep their plans 

compliant with the Internal Revenue Code requirements. The EPCRS encourages plan sponsors to correct plan errors earlier rather than later. More information is available at www.irs.gov/ep, click on “Correcting Plan Errors.” 

Is there a way to correct mistakes myself? 

Yes! Under the Self-Correction Program (SCP) many plan errors can be 


corrected without IRS involvement. 


n No notification to the IRS is required;
 

n No fees need to be paid to IRS; and
 

n Your plan and its participants will retain favorable tax benefits. Of course, 


you can also ask for IRS assurance about correcting these mistakes, too, 

through the Voluntary Correction Program. 

What if our mistakes can’t be corrected in this “do-it-yourself” 

program? 

The Voluntary Correction Program (VCP) works for plan errors that are not 

eligible for self-correction or for any error in which you want IRS assurance 

about the methods used to fix the error. 

n You must make a written submission and pay a compliance fee to the IRS. 

n Errors are corrected and the plan’s tax benefits are preserved for plan 

participants and the plan sponsor with IRS help and approval. 

And what happens if the IRS audits my plan? 

n Errors corrected appropriately under SCP or VCP will not jeopardize the 

plan’s tax-favored status when the IRS audits your plan. 

n For other errors found during an IRS examination, help is available 

through the Audit Closing Agreement Program (Audit CAP). This program 

also permits you to correct errors and preserve the tax benefits for plan 

participants and sponsors. However, your fee to the IRS will be greater 

than the fee required under VCP but less than the tax, interest and 

penalties due if the plan lost its tax-favored status. 

U.S. Department of Labor 

Employee Benefits Security Administration (EBSA) 

EBSA protects the assets of employee benefit plans (both retirement and 

health) under Title I of the Employee Retirement Income Security Act (ERISA). 

Among the key areas EBSA oversees are the critical responsibilities of those 

who exercise discretion over retirement and health plans. 

EBSA has two voluntary self-correction programs for plan administrators who 

need help in meeting ERISA requirements: 

n The Delinquent Filer Voluntary Compliance Program (DFVCP) assists late or 

missed Form 5500 filers in coming up to date with corrected filings. 

n Participation is a two-part process. For more information, including 

a calculator to help you accurately determine the penalty 

payment needed to participate in the DFVCP and the 

convenient option of paying the penalty electronically, visit 

www.dol.gov/ebsa and click on “Correction Programs.”

n To view the Form 5500, visit www.efast.dol.gov. 

n To speak with a DOL representative, call EBSA’s Office of the Chief 

Accountant at 202-693-8360 (not a toll-free number). 

n The Voluntary Fiduciary Correction Program (VFCP) affords plan sponsors 

and officials the chance to identify and fully correct certain transactions 

such as prohibited purchases, sales and exchanges, improper loans, 

delinquent participant contributions and improper plan expenses. The 

VFCP includes 19 specific transactions. 

n The VFCP also provides immediate relief from payment of excise 


taxes under a class exemption which covers six transactions.
 

n Violations can be fully and correctly resolved in four easy steps. 


For a list of violations and corrective actions, and the addresses 


of EBSA Regional Offices that can help with applications, visit 


www.dol.gov/ebsa and click on “Correction Programs.”
 

n There are a number of tools online to assist applicants in using the 

Program, including an online calculator, model application, and 

checklist. 

Here are some examples of common errors and the 

correction program that you can use to bring your 

plan into compliance: 

Plan Error: Apply to: 

Form 5500 Late or Missed Filing DFVCP 

Late or Missed Deposits of Employee Salary 

Reduction Contributions 

VFCP 

Participant Loan Failures 

(for example, loans that exceed the maximum 

permitted dollar amount) 

EPCRS 

VFCP (for certain 

failures – after 

using the EPCRS) 

Failure to Timely Amend Plan to Keep it Updated with 

Changes in the Law 

EPCRS 

Plan Operational Errors arising from the failure to 

follow plan terms (for example, an employee who 

meets the plan’s eligibility requirements but is not 

allowed to participate) 

EPCRS 

Specified Plan Prohibited Transactions (for example, 

sales or loans between the plan and a party in 

interest) 

VFCP 

For more information on: 

n DFVCP and VFCP go to www.dol.gov/ebsa and select “Correction 

Programs.” 

n EPCRS, go to www.irs.gov/ep and select “Correcting Plan Errors.”