IRS Correction Rules for Retirement Plans: Plan Administration, Remediation of Noncompliance

BARBRI

This CLE course will provide employee benefits counsel, plan sponsors, and administrators guidance on identifying critical retirement plan issues and correction methods. The panel will discuss IRS self-correction rules and procedures and the primary focus areas of IRS and DOL examinations and audits. The panel will address fiduciary liability and risks stemming from excessive payments to retirement plans, delinquent 401(k) loans, spousal/survivor rights under ERISA, and other challenges.

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 audit initiatives and procedures, identify audit risks, and take steps to remedy noncompliance.

Major compliance risks stem from the failure to recognize plan document defects, a specific area of focus during an IRS audit of a retirement plan. The IRS continues to enhance its plan correction programs to permit employers additional self-correcting operational failures.

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

In addition, recent litigation and penalties against fiduciaries, plan sponsors, and administrators have focused on excessive payments, delinquent 401(k) loans, and spousal/survivor rights. Employee benefits counsel must also navigate the nuances surrounding these issues in their analysis of their clients' administrative and operational practices.

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

Outline

1. IRS and DOL key areas of focus
2. Recognizing plan document defects
3. Remedying compliance issues to avoid liability and penalties
4. IRS self-correction rules; effective administrative procedures and corrective actions

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