Few retirement plans exist without some operational error along the way. Most are insignificant and can be easily corrected. Others may be more complex and require a formal correction process. The important point is identifying them and knowing how and when to correct them. Our team can assist with late 5500 issues, plan document failures, late 401(k) deposits, and many more.
Correcting Plan Errors
The Department of Labor and the IRS have correction programs available to help plan sponsors and fiduciaries correct plan errors, protect participants, and maintain the plan’s tax-qualified status.
Pollard can help evaluate and guide plan sponsors and fiduciaries with correction options via the appropriate program:
- Self Correction Program (SCP) – Permits a plan sponsor to self-correct certain plan failures without contacting the IRS or paying a fee
- Voluntary Correction Program (VCP) – Permits a plan sponsor to, at any time before an IRS audit, pay a limited fee and receive IRS approval for correction of plan failures
- Audit Closing Agreement Program (Audit CAP) – Permits a plan sponsor to pay a sanction to the IRS and correct a plan failure while the plan is under audit
- Voluntary Fiduciary Correction Program (VFCP) – Outlines procedures for plan fiduciaries who may be liable for fiduciary violations under ERISA to correct errors and receive relief from certain penalties and enforcement actions
- Delinquent Filer Voluntary Compliance Program (DFVCP) – Permits a plan sponsor to file late 5500 forms for a single or multiple years for a defined sanction and avoid potential late filing penalties