Qualified Plan Errors: Identification and Correction, Recent IRS and DOL Guidance, Avoiding Audits, Correction Methods

Strafford

This CLE webinar will provide employee benefits counsel with an in-depth analysis of identifying retirement plan errors and making necessary corrections. The panel will discuss critical issues for qualified plan structuring and implementation, recent IRS and DOL guidance and enforcement actions, available programs for self-correcting plan errors and challenges, and other vital matters.

Description

The IRS and DOL continue their heightened scrutiny of retirement plans. Plan audits typically reveal noncompliance issues that can result in substantial penalties for employers. ERISA counsel and advisers must understand IRS and DOL enforcement and audit procedures and identify audit risks and steps to remedy noncompliance through available self-correction programs or other options.

Significant compliance risks stem from the failure to recognize plan document defects, a specific area of focus during an IRS audit of a retirement plan. In 2021, the IRS enhanced its plan correction programs to permit employers additional self-correcting operational failures, including two new alternative correction methods: (1) the funding exception correction method and (2) the contribution credit correction method. For retirement plans, the enhanced plan correction program includes an increase to the small overpayment limit and repayment through an installment agreement.

Also, the DOL has focused, and continues to focus, on timely deposits of employee deferral contributions--so much so that some employers deposit employee-deferral contributions before paychecks are issued.

Compliance risks include, among others, failing to notify and pay terminated employees, not updating plans to the latest ERISA requirements, and using improper amounts to determine employee compensation. Companies risk exposure to government penalties and sanctions, such as disallowing deductions for employer contributions and plan disqualification.

Listen as our panel of specialists discusses current IRS and DOL focus areas, correcting noncompliance, and mitigating audit risks.

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