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Document sponsor can correct users’ failures to adopt the document


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The Internal Revenue Service announced a new correction program under which a preapproved documents sponsor may cleanse many users failures to adopt the document.

https://www.irs.gov/Retirement-Plans/New-Program-Allows-Providers-of-Pre-Approved-Plan-to-Correct-Missed-Deadlines

If a document sponsor has only 20 plans to cleanse, the minimum fee of $10,000 averages to $500 per plan, which is the VCP fee for a super-micro plan.

But if a recordkeeper has 10,000 plans to cleanse, the maximum fee of $50,000 averages to $5 per plan.

What do BenefitsLink mavens think about this?

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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I don't think about it too much :-) Just kidding... I, honestly, would like to see a case where this becomes beneficial to a document sponsor or service provider. I imagine it would be some large scale operation where a provider is tasked with restating thousands of plans and may miss by 1000 or so.

I cannot see it benefiting a boutique TPA firm. Just my thought.

Good Luck!

CPC, QPA, QKA, TGPC, ERPA

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