VCP Correction of 403b Operational Failures

[Guest ERISAfied]

Has anyone researched whether a 403b plan sponsor can use VCP to correct a past failure to follow plan terms re making employer matching contributions?

I'm wondering whether that kind of failure could be shoehorned into the categories of operational failures for which the IRS accepts VCP submissions, or whether it would be rejected as ineligible.

Thanks in advance for your thoughts.

[ETA Consulting LLC]

Sure. You may not need VCP (if self-correction is available).

Good Luck!

[PensionPro]

See following from the IRS:

"Recently, we have received several Voluntary Correction Program submissions for 403(b) retirement plan failures that are currently ineligible for correction through VCP. Ineligible submissions include cases where:

the plan’s written program did not satisfy the legal requirements under Code §403(b) and the 403(b) final regulations, or the plan failed to adopt a written plan program before December 31, 2009; or

the plan failed to operate according to its written program’s terms.

We will return all VCP submissions (including fees) containing ineligible failures.

An employer sponsoring a 403(b) plan may currently use VCP to correct employer eligibility and demographic failures, and the operational failures listed in Revenue Procedure 2008-50 §5.02(2)(a). We are in the process of updating Revenue Procedure 2008-50 to expand EPCRS to include post-December 31, 2008 failures."

[Guest ERISAfied]

See following from the IRS:

"Recently, we have received several Voluntary Correction Program submissions for 403(b) retirement plan failures that are currently ineligible for correction through VCP. Ineligible submissions include cases where:

the plan’s written program did not satisfy the legal requirements under Code §403(b) and the 403(b) final regulations, or the plan failed to adopt a written plan program before December 31, 2009; or

the plan failed to operate according to its written program’s terms.

We will return all VCP submissions (including fees) containing ineligible failures.

An employer sponsoring a 403(b) plan may currently use VCP to correct employer eligibility and demographic failures, and the operational failures listed in Revenue Procedure 2008-50 §5.02(2)(a). We are in the process of updating Revenue Procedure 2008-50 to expand EPCRS to include post-December 31, 2008 failures."

Thanks, ERISAtoolkit.com and PensionPro for your quick responses.

Yes, I've seen the quoted cautionary statement on the IRS website. I was wondering if anyone has any ideas on how to characterize an employer's matching contribution failure so it fits within the failure categories listed in §5.02(2)(a) of the Rev. Proc....