SECURE Act 2.0 and the Future of EPCRS

American Bar Association Joint Committee on Employee Benefits [JCEB]

The Employee Plans Compliance Resolution System (EPCRS) is among the IRS’ most successful initiative ever. Starting in 1990 with a temporary set of administrative procedures administered by field offices, EPCRS has morphed into an accessible and effective way to fix most qualification issues arising under tax qualified plans. For most of it history EPCRS was set out in IRS revenue procedures.

With the enactment of the SECURE Act 2.0, that has changed, as Congress has intervened to provide some important new clarifications and provided some much needed fiduciary relief. Among other things, the new law expands EPCRS to provide additional opportunities for self-correction; offers additional flexibility for the correction failures relating to plan loans; makes permanent a safe harbor for correcting certain elective deferral failures involving automatic contribution features; and enacts new rules relating to the correction of overpayments. Congress gave the IRS two years to revise EPCRS to reflect the new rules. This program examines the changes to EPCRS enacted by Congress; explains their likely impact on plans and plan sponsors; and otherwise speculates on the contours of the “new and improved” EPCRS.

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