PRSA Non-compliance

[Young Curmudgeon]

The pension plan has failed to provide notices to particpants in the past. A VCP is being pondered to correct the defect. When correcting this type of defect, is there a limit (or IRS rule of thumb) on how many years back we need to go find people impacted? The plan has been around for decades and some records no longer exist.

[Guest Kabert]

I don't think there's a "limit" or rule of thumb. Doesn't the EPCRS rev proc shed light on this? That rev proc's standard is... put people back in the position they would have been in as if the mistake had not occurred. The basis for this standard is the rule that you pay participants what the plan and ERISA says they're required to be paid (and in the forms of benefits provided/required), and no more and no less. If you pay too much or too little, you've violated ERISA and you've got a 401(a) qualification defect. This includes failure to issue suspension notices, by the way. If you research this and related issues, you'll find lots of cases and other guidance....