SCP to Correct for Failure to Obtain Spousal Consent

[J Simmons]

Small ER ends professional practice, pays out benefits to all EEs but the owner/EE. Continues QRP (holds merged MPP assets) for purposes of creditor protection until professional malpractice statute of limitations period runs. During that period, owner/EE makes 4 withdrawals during the last PY and the current PY, dating back 15 months. There was no 402f notice, no QJSA/QPSA notices or waiver by spouse of owner/EE. Owner/EE is passed the later of age 62 or QRP's normal retirement age, so not a problem in failing to give notice of right to postpone payout.

Incident to steps being taken to terminate the QRP, these notice and consent problems were discovered. In looking at Rev Proc 2008-50, section 6.04 on VCP describes the method for VCP correction, referring to Appendix A.07 for similar correction principles, of spousal consent failures.

The QRP qualifies for SCP correction of significant operational failures by SCP as the QRP has its own D-Letter. SCP correction may be timely accomplished.

My question of whether VCP is required or SCP is available boils down to whether these spousal consent and notice problems amount to something other than an operational failure as defined in section 5.01(2)(b), i.e., solely a failure to follow plan provisions.

Thanks in advance for input.