Can you use self-correction (SCP) under Rev. Proc. 2021-30 if all requirements are met, but plan was terminated??

The following is a prior BenefitsLink exchange that only had two posts:

I completely agree with Roxie99's summation of the issue. A reader could draw from Section 4.07 of Rev. Proc. 2021-30 the negative inference that SCP is not available for a terminated plan. However, it's not really clear from the text that the IRS intended this inference.

I don't see why the IRS would want to foreclose the use of SCP for a terminated plan. For example, suppose that a few months after a plan was terminated the plan sponsor discovers that a few participants were overpaid a few hundred dollars and also that some participants were underpaid a small amount because the employer had not made some contributions it was committed to making. These were inadvertent administrative errors and the employer would like to self-correct in the prescribed fashion for these errors, but the ability to do so is being questioned because the plan has been terminated.

Has anyone had any hands-on experience with this issue with IRS, or possibly heard someone from IRS at a conference expand on this issue either way? Have some practitioners just assumed that IRS did not intend the negative inference and used self-correction for terminated 401(a) and 403(b) plans, without this having been called into question by IRS or anyone else?

I hear you, but I was too concerned about the negative inference of Section 4.07 of Rev. Proc. 2021-30 to risk it. Issue was that short staffing due to Covid caused lengthy delay in testing for terminated plan, and then it was too late to correct failed testing other than through EPCRS. We used VCP. Still waiting to hear from IRS.

Thanks very much, Centerstage. I hear you as well. It's just unclear. 

Hello Luke Bailey -- Just wanted to mention that we got some guidance on SCP for terminated plans in Q&A 2 of IRS Notice 2023-43:

Q-2. Before Rev. Proc. 2021-30 is updated pursuant to section 305(g) of the SECURE 2.0 Act, are there any Eligible Inadvertent Failures that a plan sponsor may not self-correct?

A-2. Yes. Before Rev. Proc. 2021-30 is updated pursuant to section 305(g) of the SECURE 2.0 Act, a plan sponsor may not self-correct the following Eligible Inadvertent Failures: . . .

(3) A significant failure (that is, a failure that is not an insignificant failure, as determined in accordance with the factors set forth in section 8.02 of Rev. Proc. 2021-30) in a terminated plan. . . .