The Internal Revenue Service issued updated correction procedures for employer-sponsored retirement plans on New Years’ Eve. Revenue Procedure 2013-12 updates the Employee Plans Compliance Resolution System (“EPCRS”) previously set forth in Revenue Procedure 2008-50. Now, nonprofit employers sponsoring 403(b) plans can correct document failures with the IRS’s blessing.
A 403(b) plan document failure can be corrected under the voluntary compliance program (“VCP”) and, if submitted before December 31, 2013, the VCP fee will be halved. Therefore, 403(b) plan sponsors that failed to comply with the 2009 regulations to timely adopt a 403(b) plan document are encouraged to use VCP this year to correct that failure.
Under the updated EPCRS, new IRS Forms 8950 and 8951 must be included with each submission made using VCP.
In addition to the changes made to cover 403(b) plan document failures, the updated EPCRS includes many unsurprising clarifications and expected modifications to reflect changes in applicable law and regulations that have occurred in the last few years.
For corrections that must be submitted to the IRS for approval, the updated procedures apply to submissions made on or after April 1, 2013.