Source: https://www.insidecompensation.com/2013/03/22/irs-releases-vcp-kit-to-help-403b-plans-who-failed-to-timely-adopt-a-plan-document/
Timestamp: 2019-05-23 19:48:37
Document Index: 758337270

Matched Legal Cases: ['§ 403', '§ 403', '§ 403', '§ 403', '§ 403', '§ 401', '§ 403', '§ 403', '§ 415', '§403']

IRS Releases VCP Kit to Help 403(b) Plan Sponsors Who Failed to Timely Adopt a Plan Document | Inside Compensation
Home > Defined Contributions Plans > IRS Releases VCP Kit to Help 403(b) Plan Sponsors Who Failed to Timely Adopt a Plan Document
A § 403(b) plan that failed to adopt a plan document by December 31, 2009 is not entitled to favorable tax treatment. However, under new guidance, a plan may regain its favorable tax treatment if it adopts a written plan document and requests a compliance statement through the Voluntary Compliance Program (“VCP”).
The IRS recently released a Voluntary Correction Program Submission Kit to assist sponsors of § 403(b) retirement plans who failed to adopt a written plan document before January 1, 2010. The Submission Kit includes the forms a plan sponsor must submit to request a compliance statement as well as completed sample forms.
Plan sponsors of § 403(b) plans who failed to timely adopt a written plan document should consider completing a VCP submission before the end of 2013. Correction fees have been temporarily reduced; fees are 50 percent of the normal amount for plan sponsors who submit a VCP request before December 31, 2013 if the only failure is the failure of a § 403(b) plan to timely adopt a written plan document.
In addition to allowing § 403(b) plan sponsors to correct the failure to timely adopt a written plan document, the new Employee Plan Compliance Resolution System (“EPCRS”) allows plan sponsors to correct operational and other failures in the same manner as sponsors of § 401(k) plans. The new EPCRS system becomes effective April 1, 2013. The Service answered questions about the effect of the new EPCRS on § 403(b) plans, including how it affects plan sponsors whose plans are currently under audit, in the February 13, 2013 edition of Employee Plans News. The Service has also issued a “403(b) Fix-It Guide” to help sponsors of § 403(b) plans correct common mistakes. The Fix-It Guide contains a general overview of the EPCRS correction process, plus detailed information about how to fix, and how to avoid, 10 common mistakes, including sponsorship by an ineligible organization, operational failures, failure to follow the universal availability rule, § 415 failures, permitting ineligible employees to make 15-years of service catch-up contributions, contributions in excess of the 402(g) and other statutory limits, and loan and hardship distribution failures.
Tags: §403(b), EPCRS, VCP