missed participants

[Guest jc1457]

Hi,

I am reading through the IRS's EPCRS program. I want to make sure my conclusion on the correction method we use confirms with other's understanding. We've used the program many times now - but each situation can be unique.

We have a small money purchase plan (about 11 participants). The plan administrator has just realized that from 1996 to 2006 she missed two employees and did not treat these employees as eligible participants. So 2 participants out of 11 were missed for 10 years. This error was caused by an error she made - she misunderstood the eligility requirements. The client is new to us and when we discussed eligbility with her, this error was uncovered.

We have calculated the missed contribution plus earnings due to these two employees. Would you self correct this or file under VCP. I believe since it covered 10 years that we should file under VCP.

Thanks so much!

[Kevin C]

It's a judgment call on whether a multiple year failure is insignificant and can be corrected under SCP or significant, which means VCP.

Here is a previous discussion.

http://benefitslink.com/boards/index.php?showtopic=47539