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COLLECTED WISDOM™ on Compliance and Regulatory Related Issues

This page gathers relevant information for 401k plan managers, sponsors, administrators, recordkeepers and others with plan fiduciary and administrative responsibilities. It covers many aspects of compliance and regulatory related issues.

This archive contains not only the most current material on the topic, but also older items that are still relevant, provide background, perspective or are germane to the topic.

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Scary Surprise for Some New 401k Sponsors: Plan Audit Costs

You are a business owner and have just found out that as part of your Form 5500 filing obligations you need to engage the services of an independent qualified public accountant to audit plan operations and finances. The cost of these services run about $10,000. This is a scary surprise for you. Did things have to end up this way?

Source: Eforerisa.com, October 2021

DOL Proposes Rule to Remove Barriers to Considering ESG Factors in Retirement Plan Management

The DOL announced a proposed rule that would remove barriers to plan fiduciaries' ability to consider climate change and other environmental, social and governance factors when they select investments and exercise shareholder rights. The proposed rule, "Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights," follows Executive Order 14030, signed by President Biden on May 20, 2021. The order directs the federal government to implement policies to help safeguard the financial security of America's families, businesses and workers from climate-related financial risk that may threaten the life savings and pensions of U.S. workers and families.

Source: Dol.gov, October 2021

New IRS Snapshot Tackles Deemed Distributions

A new IRS issue snapshot explains when different kinds of participant loan failures will cause a taxable deemed distribution. The snapshot also highlights the provisions of the CARES Act that gave more loan flexibility to participants affected by COVID-19. While the snapshot summarizes existing guidance rather than providing new information, it may alert plan sponsors and taxpayers to the kinds of issues IRS agents review during audits.

Source: Mercer.com, October 2021

SECURE Act Revisited -- Plan Participants

The SECURE Act provides more access to retirement plans for more people, allows participants more options in retirement, and provides small businesses with incentives to offer and additional options to establish new 401k plans. With all the provisions now effective, here's what plan participants need to know.

Source: Benefit-Resources.com, October 2021

IRS Updates Issue Snapshot on Participant Loans

On Sept. 28, the IRS updated the "Issue Snapshot" which discusses the laws and regulations governing plan loans. This article reviews the update.

Source: Asppa.org, October 2021

Audit Communications to Plan Sponsors More Robust Under SAS 136

The AICPA's Statement on Accounting Standards No. 136 will meaningfully change the audit process for defined contribution plan sponsors. The AICPA issued SAS 136 intending to give readers of the audit report a better understanding of the scope of the audit, as well as clarifying the responsibilities of the plan sponsor and auditor. SAS 136 requires a greater level of written communication to those charged with governance.

Source: Orba.com, October 2021

2021 Retirement Plan Regulatory Update

While businesses and the people they employ continued to navigate the ever-changing landscape of COVID-19, 2021 has brought new and refurbished legislature top of mind for plan sponsors. Despite the SECURE Act's debut nearly two years ago, many plan sponsors are just now contemplating whether to adopt some of the provisions. Meanwhile, plan sponsors are gearing up for the House of Representative's proposed SECURE 2.0 bill. This 15-page paper covers this development, the IRS' EPCRS changes, updates from the DOL, a review of notable updates in retirement plan fee litigation cases, plus much more.

Source: Multnomahgroup.com, October 2021

2021 Plan Amendment Deadlines and Other Looming Fourth Quarter Considerations

As the year draws to a close, it is helpful for employers to pause to evaluate employee benefit plan amendment deadlines and other crucial fourth-quarter considerations. Ten are reviewed here.

Source: Jacksonlewis.com, October 2021

Fee Disclosures Aren't Working. Here's How to Fix Them

The GAO tested participant understanding of some sample fee disclosures, and the results were disappointing. Almost a decade after the DOL fee disclosure regulations became effective, it is clear that they are failing in their intended goal of demystifying retirement plan fees. Without waiting for the DOL to act, plan fiduciaries can implement the GAO recommendations and insist that their participants get disclosures that clearly provide the essential information they need to make investment decisions.

Source: Rpaconvergence.com, September 2021

Who Is Liable for Retirement Plan Mistakes?

When a 401k or similar defined contribution plan fails to apply the correct definition of compensation in determining benefits, fails to calculate vesting service correctly, or doesn't make distributions to participants who need to get required minimum distributions, who is responsible? Plan sponsors are often surprised to learn that they are. Here is why your recordkeeper is not responsible and what to consider.

Source: Shrm.org, September 2021

Deemed Distributions: Participant Loans - Updated

Participant loans are available in many retirement plans, although plans are not required to offer participant loans. Failures may occur when participant loans exceed the maximum dollar amount, have payment schedules that do not meet the time or payment requirements or go into default when payments are not made. Each of these failures, and other issues, will cause the loan to become a deemed distribution for tax purposes. This updated IRS "Issue Snapshot" will summarize what triggers a deemed distribution and when it can occur.

Source: Irs.gov, September 2021

Plan Document Restatements Essential to Retirement Plan Compliance

Two of the key rules for retirement plans are that tax-qualified retirement plans must be documented and that plan documents must include language that complies with numerous Internal Revenue Code provisions. Complying with the second rule can be a challenge, because the regulatory agencies that control retirement plans, such as the IRS and the DOL, frequently make changes that affect plans. In addition, enacted legislation can require retirement plan sponsors to update or amend their plan documents.

Source: Plansponsor.com, September 2021

Cybersecurity and DOL Document Requests

The DOL's "Cybersecurity Document Requests" reveal the DOL has been asking for quite an extensive list of documentation. Moreover, the DOL has noted that plan administrators should be aware that they may need to consult not only with the sponsor of the plan, but with the service providers of the plan to obtain all the documents requested, and if they are unable to produce the requested documents the plan administrator must specify the reasons why the documents are unavailable.

Source: Retirementlc.com, September 2021

IRS Updates Guidance Regarding Correction of Tax-Qualified Plan Errors Under EPCRS

Mistakes happen, even to tax-qualified plans and 403b plans that have implemented internal controls designed to reduce, if not eliminate, the likelihood of plan failures. To alleviate these disproportionate adverse tax consequences and encourage the correction of document and operational plan failures, the IRS maintains the Employee Plans Compliance Resolution System. The IRS periodically updates EPCRS, and its most recent version, Revenue Procedure 2021-30, issued on July 16, 2021, makes several significant changes that are reviewed here.

Source: Wagnerlawgroup.com, September 2021

Changes to Annual 5500 Reporting Requirements Proposed

The proposal package includes Form 5500 changes and the proposed rule. DOL also issued a fact sheet describes the package. The package would create a new direct filing entity called a Defined Contribution Group, make reporting equal for MEPs and PEPs, simplify how to count participants, add compliance questions, request additional information from multiemployer DB plans, and modify the filing requirements for single-employer DB plans.

Source: Segalco.com, September 2021

Courts Giving DOL More Time to Claim ERISA Violations

The Department of Labor is relying on a recent Supreme Court decision to effectively extend the amount of time the agency has to bring fiduciary breach claims. DOL investigations often last years, so it is common for DOL to run up against the statute of limitations under ERISA.

Source: Groom.com, September 2021

Plan Sponsors Now Have a Deadline for Providing Lifetime Income Illustrations

Employers who sponsor 401k plans and other DC plans in which participants may direct the investments of their accounts now have a deadline to provide lifetime income illustrations in those plans' benefit statements. The DOL recently published guidance addressing these requirements. While helpful, the guidance is still subject to change in a potential final regulation. As such, employers should work closely with their plan administrators and legal counsel to navigate the contours of the evolving lifetime income rules.

Source: Employeebenefitslawreport.com, September 2021

IRS Extends Interim Amendment Deadline for Preapproved 401k Plans

For adopters of preapproved plans, a sponsoring employer's tax-filing deadline is no longer relevant in determining the date by which an interim amendment must be adopted. Instead, the key date is the end of the second calendar year following the calendar year in which the new law change became effective for the preapproved plan.

Source: Compliancedashboard.net, September 2021

Agencies Propose Extensive Form 5500 Amendments

The DOL, Department of the Treasury, and Pension Benefit Guaranty Corporation recently released a notice of proposed revisions to the Form 5500 Annual Return/Report of Employee Benefit Plan filed for employee pension and welfare benefit plans under ERISA and the Internal Revenue Code. The package issued by the Agencies contains both a notice of proposed revisions to the Forms themselves as well as a notice of proposed regulatory changes to the applicable Form 5500 regulations.

Source: Groom.com, September 2021

EPCRS Update Offers New Tools to Correct Retirement Plan Errors

The updated version of EPCRS, which was published in Revenue Procedure 2021-30, supersedes the prior version of EPCRS. Plan sponsors and administrators should familiarize themselves with the EPCRS changes, which are generally effective July 16, 2021. This article provides an overview of some of the significant changes made to EPCRS.

Source: Erisapracticecenter.com, September 2021

How Important Are Beneficiary Forms?

When hiring a new employee, one of the initial tasks given to that employee is completing various beneficiary forms for the company's benefit plans. Most people will fill it out and not think about that initial election ever again. Some employees may not fill one out at all. So why is it a big deal?

Source: Asppa.org, September 2021

DOL Asks for Comments on Proposed Changes to Form 5500

The DOL has joined the IRS and the PBGC in requesting public comments on proposed revisions to the Form 5500 Annual Return/Report. At the same time, the DOL is publishing a notice of proposed changes to its implementing regulations under Title I of the Employee Retirement Income Security Act.

Source: Plansponsor.com, September 2021

Regulators Unveil Proposed Changes to Group Form 5500 Reporting

The proposal unveiled Tuesday would establish a new type of direct filing entity called a Defined Contribution Group Reporting Arrangement and add a new Schedule DCG -- detailing individual plan information -- that such reporting groups must file.

Source: Pionline.com, September 2021

Lost but Not Forgotten: DOL Guidance on Missing Participants

Plan sponsors should work with their recordkeeping partners to understand their ability to regularly audit plan census information and to search for missing participants. Determining which steps to take should incorporate a review of ERISA's fiduciary duties, including the duties to act with care, skill, prudence, and diligence, along with the privacy concerns of social media or beneficiary outreach.

Source: Callan.com, September 2021


Perfection is aspirational, especially when it comes to retirement plan administration. That is why 30 years ago, in 1991, the IRS created the Employee Plan Compliance Resolution System, a mechanism for plan sponsors to fix mistakes. Compliance with pre-approved correction methods grants plan sponsors forgiveness without punishment. But sometimes, even the approved correction methods need fixing.

Source: Belfint.com, September 2021

IRS Priority Guidance Plan Includes Retirement Items

The IRS has issued its initial 2021-2022 Priority Guidance Plan, in which it describes guidance projects in the current fiscal year. Many items in the plan have appeared in prior years' Priority Guidance Plans. A number of the guidance items deal with retirement savings arrangements, including those noted here.

Source: Ascensus.com, September 2021

Plan Cybersecurity Guidance: DOL Enforcement Warrants Plan Sponsor Action

Benefit plan sponsors and plan fiduciaries should take note and act quickly. The Department of Labor has issued a new cybersecurity guidance package with far-reaching effects and has already begun including this in its enforcement efforts.

Source: Poynerspruill.com, September 2021

Revenue Procedure 2021-30 Brings Welcome Changes to IRS Correction Program

Retirement plan administrators are required by law to abide by specific requirements in the Internal Revenue Code. If a plan administrator fails to administer the plan per Code requirements, the plan is at risk of being disqualified. The IRS, however, has allowed plan administrators to voluntarily correct mistakes through the Employee Plans Compliance Resolution System, and thereby continue to provide their employees with retirement benefits on a tax-favored basis. On July 15, 2021, the IRS published Revenue Procedure 2021-30 that updates EPCRS. This is a high-level overview of the significant changes included in Rev. Proc. 2021-30.

Source: Kriegdevault.com, September 2021

Need a Do-Over? IRS Expands and Updates Qualified Plans Correction Guidance

The IRS recently issued Revenue Procedure 2021-30, which provides an updated version of the EPCRS. EPCRS is the IRS's comprehensive program for plan sponsors to correct tax-qualified plan errors. This EPCRS update expands plan sponsors' ability and methods to correct overpayments and to self-correct certain plan failures without filing a VCP application, which can be costly and time-consuming.

Source: Mwe.com, September 2021

Dust Off Your ERISA Fiduciary Liability Insurance Policy

Now is a great time to dust off your company's ERISA fiduciary liability policy to ensure your plan fiduciaries have robust, comprehensive coverage. Fiduciary liability policies provide coverage for claims related to the administration and operation of retirement and health and welfare plans. Unlike D&O coverage, fiduciary liability policies rarely get much attention but can similarly provide significant protection to a company's Board or other plan fiduciaries.

Source: Benefitslawadvisor.com, September 2021

Essential Form 5500 Filing Guidance for 401k Plan Sponsors

It's important to understand that the signer of Form 5500 is considered a plan fiduciary who has potential personal liability for the compliant administration of the 401k plan. This includes being responsible for the accuracy of the information contained on Form 5500. Accuracy is important not only because it's part of operating compliantly but because errors on Form 5500 can raise a red flag for the IRS or the DOL and could trigger an audit.

Source: Alliant401k.com, September 2021

IRS Updates Tools for Reviewing Retirement Plan Document Compliance

The IRS has updated nearly all of the "subject matter packages" used by IRS specialists when reviewing retirement plan documents. Each package consists of an Explanation, a Worksheet, and a Checksheet that are designed to be used together. In general, the Explanations describe the applicable legal requirements and provide citations to the Code and regulations, the Worksheets consist of yes-or-no questions, and the Checksheets provide lists of required plan provisions. While they were created for IRS personnel, these materials can also be used by plan sponsors to review a plan's compliance before submitting a determination letter application.

Source: Thomsonreuters.com, September 2021

Employee Benefit Plan Audits Set for Major Changes, More Transparency

Employee benefit plan audits and reporting will be quite different soon as changes in generally accepted auditing standards take effect. Communications with management and those charged with governance will be more substantial and robust. The auditor's report will be more comprehensive and clearer. And practitioners will no longer issue a disclaimer when management elects to have an audit performed under ERISA Section 103(a)(3)(C).

Source: Journalofaccountancy.com, September 2021

Reporting Rules for "Groups of Plans" Poised for Release

Proposed regulations drafted by the DOL implementing changes under the SECURE Act that allow a group of plans to file a single Form 5500 annual return could be released any day now. Based on the regulatory listing posted on the OMB website, it appears the White House has completed its review of the proposed regulations, which were sent to OMB on July 30. This is typically one of the last steps before a regulatory proposal is released publicly.

Source: Asppa.org, September 2021

What Does a 401k Audit Encompass?

The determining factor for whether your 401k plan needs an audit depends on the number of participants in the plan on the first day of the plan year. If it is determined by the administrator that the plan requires an audit, there are two types that the administrator can instruct the auditor to perform. Within both types of 401k plan audits, there are several high-level areas of the plan that an auditor will test.

Source: Eisneramper.com, August 2021

Retirement Plan Census Data: It's Foundational and Fundamental

Sharing census information at the close of each plan year allows TPAs to proactively administer a retirement plan, find potential issues and maintain a plan's tax-qualified status. The accuracy and completeness of a plan's census data helps in compliance testing, making census data the most important aspect of a retirement plan.

Source: Definiti.com, August 2021

Retirement Plan Sponsors Have Ultimate Responsibility for Operational Compliance

Two law firms have issued reminders that plan sponsors are ultimately liable for any plan operational errors, even if they rely heavily on recordkeepers and third-party administrators for day-to-day plan administration. Indemnification clauses in service provider contracts, PEPs, and 3(16) administrators can reduce plan sponsors' fiduciary burden, but none offer complete protection, attorneys say.

Source: Plansponsor.com, August 2021

Are You Ready to Comply With the New Lifetime Income Disclosure Requirement for Benefit Statements?

The Setting Every Community Up for Retirement Enhancement Act of 2019, enacted December 20, 2019, added a new annual disclosure requirement for benefit statements to participants and beneficiaries. The new disclosure requirement applies to all ERISA-covered defined contribution plans (e.g., 401k and 403b plans), regardless of whether annuities are offered under the plan. With the effective date fast approaching, there has been some confusion as to when the lifetime income disclosure must first appear on benefit statements.

Source: Verrill-law.com, August 2021

DOL Initiates Cybersecurity Retirement Plan Audit Initiatives

The DOL recently released its first-ever guidance on cybersecurity for retirement plans. Just a few months after issuing this guidance, reports are coming in that the DOL has issued information and document requests to plan sponsors that are "probing and indicate serious inquiry by the DOL." These requests are asking for all cybersecurity and information security program policies, procedures, and guidelines that relate to retirement plans, whether applied by the plan sponsor or by a provider, as well as detailed documentation of specific actions taken by the plan's fiduciaries and providers, including many that the DOL addressed in its guidance.

Source: Hallbenefitslaw.com, August 2021

DOL "Encourages" Retirement Plan Fiduciaries to Recoup Uncashed Checks From Prior Recordkeepers

Taking the form of a letter-based initiative, the DOL is now urging retirement plan fiduciaries to recoup amounts held by former recordkeepers or paying agents that might have been overlooked during the transition of the service provider relationship to a new vendor. These letters notify retirement plan fiduciaries of the existence of small uncashed check balances, and direct plan fiduciaries to coordinate with former recordkeepers to restore these amounts to the participants and beneficiaries who failed to cash distribution checks.

Source: Morganlewis.com, August 2021

Ensuring Clean Participant Data

One of the most critical aspects in maintaining a healthy retirement plan is guaranteeing clean participant data, says John Bikus, president of PBI Research Services, a provider of death audit and location services. Keeping participant data accurate could help plan sponsors avoid dealing with missing participants or a cybersecurity attack.

Source: Plansponsor.com, August 2021

Form 5500 Clarification: Better Late Than Never

One of the highly useful provisions from the SECURE Act is the ability to adopt a new plan after the end of the plan year, as late as the filing deadline for the employer's tax return. This provision created a significant question concerning Form 5500 filing: does a plan that was adopted after the end of 2020 but effective for 2020 (and for which there were no plan assets as of December 31, 2020) need to file a Form 5500 for the 2020 year?

Source: Ferenczylaw.com, August 2021

Who is Considered an Employee for Retirement Purposes?

Who is considered an employee for retirement purposes? Why is it important? The answer to this question can be very complex and cause issues when not done correctly.

Source: Consultrms.com, August 2021

How Important are Beneficiary Forms?

When hiring a new employee, one of the initial tasks given to that employee is completing various beneficiary forms for the company's benefit plans. Most people will fill it out and not think about that initial election ever again. Some employees may not fill one out at all. So, why is it a big deal?

Source: Consultrms.com, August 2021

Good News: IRS Issues Updated Guidance Enhancing Plan Correction Programs

On July 15, 2021, the IRS updated its Employee Plans Compliance Resolution System by issuing Revenue Procedure 2021-30. The EPCRS changes and revisions, which generally became effective on July 16, 2021, are beneficial to plan sponsors, participants, and the retirement plan community. Noteworthy changes made by the IRS in Rev. Proc. 2021-30 are reviewed here.

Source: Workforcebulletin.com, August 2021

How to Prepare for a Retirement Plan Audit

In most cases, the odds of receiving notice from the IRS or DOL stating that they plan to audit your retirement plan are slim. However, if that situation arises, it is important to be prepared for what lies ahead. Knowing what is involved can enable you to stay on top of your legal and regulatory obligations, as well as help you successfully navigate through a plan audit.

Source: Orba.com, August 2021

Retirement Plans -- IRS Gives New Options for Voluntary Correction but Also Takes Away

The IRS recently issued new guidance for voluntary correction of retirement plan qualification errors in Revenue Procedure 2021-30. The IRS has given practitioners more options for self-correction, including an extension of the time for correcting errors, extending correction methods for certain deferral errors, and providing additional options for dealing with overpayments of benefits. The IRS is taking away the procedure for filing anonymously but has added an option for a pre-filing conference on an anonymous basis.

Source: Employeebenefitslawgroup.com, August 2021

DOL Clarifies Lifetime Income Disclosure Requirement

Section 203 of the SECURE Act amended ERISA to require 401k and other DC plans to include an LII annually as part of participant benefit statements. On July 26, 2021, the DOL issued a brief set of Frequently Asked Questions clarifying certain issues related to the interim final rule implementing the lifetime income illustration.

Source: Groom.com, July 2021

Khawar: Cryptocurrency Guidance on the Horizon

Speaking July 27 at the 2021 NAPA D.C. Fly-In Forum, the Acting Assistant Secretary for the DOL's Employee Benefits Security Administration outlined the key areas the department is working on, including both cryptocurrency and cybersecurity issues.

Source: Asppa.org, July 2021

DOL Official Sheds Light on Rollover Recommendations

Cautioning those looking to "game the system," a senior Labor Department official affirmed July 27 that suggesting investments that could occur after a rollover is tantamount to recommending the rollover, and if it meets the rest of the five-part test will constitute fiduciary advice regardless of how it's phrased.

Source: Asppa.org, July 2021

Gomez Nominated for EBSA Post

President Biden has nominated Lisa M. Gomez for Assistant Secretary of Labor for the Employee Benefits Security Administration. Ms. Gomez is a partner at the law firm of Cohen, Weiss and Simon and chair of the firm's management committee.

Source: Ascensus.com, July 2021

EBSA Addresses Timing of Lifetime Income Disclosures

Under a set of Frequently Asked Questions issued by the DOL, participant-directed plans now have a firm compliance date to provide lifetime income illustrations. Plans which must issue quarterly statements under ERISA Section 105 can incorporate their first LII on any quarterly statement up to the second calendar quarter of 2022, ending June 30, 2022.

Source: Napa-net.org, July 2021

Updates to EPCRS Correction Programs Encourage Employers to Self-Identify, Correct Mishaps

On July 16, 2021, the IRS issued Revenue Procedure 2021-30, the most recent comprehensive official guidance concerning the IRS's Employee Plans Compliance Resolution System. This article is intended as a general overview of Rev. Proc. 2021-30 as it affects 401k plans and is not meant to address the details of plan qualification.

Source: Compliancedashboard.net, July 2021

DOL Plan Audits Updated to Include Several Questions About Compliance With Its Cybersecurity Guidelines

The DOL updated its audit inquiries to include probing questions for plan fiduciaries about their compliance with agency cybersecurity guidelines. So, what do those inquiries look like? In short, the DOL is asking plan sponsors to produce: "all documents relating to any cybersecurity or information security programs that apply to the data of the Plan, whether those programs are applied by the sponsor of the Plan or by any service provider of the Plan."

Source: Benefitslawadvisor.com, July 2021

Form 5500 and SAS 136

The AICPA postponed the mandatory effective date of the new audit standard, SAS 136, until next year, but the DOL had already updated Form 5500 to incorporate the new reporting rules. So now what?

Source: Belfint.com, July 2021

Industry Best Practice: Fraud Controls

The protection of retirement accounts can only be fully realized with a partnership between plan sponsors, fiduciaries, recordkeepers, participants, and where applicable advisors. There must be layered controls as there is not a single solution to protect accounts. These controls should be a combination of preventative, detective, and responsive controls. This fraud control chart is intended to highlight a minimum set of controls that should be considered and set expectations for all parties involved.

Source: Sparkinstitute.org, July 2021

DC Plan Distributions: Considerations and Recommendations

The COVID-19 pandemic has challenged individuals and organizations to continue operating during a time where face-to-face interaction may not be plausible, and access to organizational resources may be restricted. However, life has not stopped, and participants in your employee benefit plan may continue to make important decisions based on their financial needs. To help you prepare for a potential IRS examination, this article has listed some requirements for participants to receive Required Minimum Distributions, hardship distributions, and coronavirus-related distributions, recommendations of actions you can perform, and documentation to retain as added internal controls.

Source: Berrydunn.com, July 2021

IRS Proposes Electronic Filing Requirements for Certain Information Returns

The IRS has released a pre-publication version of proposed regulations amending rules intended to increase the filing of electronic returns in accordance with the Taxpayer First Act of 2019. Additionally, the IRS has withdrawn previously proposed regulations regarding electronic filing that were published on May 31, 2018. The new proposed regulations reduce the threshold by which filers must electronically file from 250 to 100 returns for the 2022 calendar year.

Source: Ascensus.com, July 2021

401k Plan Restatements Required By July 2022

Every six years, the IRS requires employers with qualified, pre-approved plans to restate their plan documents to reflect changes that have occurred since the plan documents were created or last restated. For defined contribution plans, the current restatement cycle -- called Cycle 3 -- opened on Aug. 1, 2020, and will close on July 31, 2022, meaning all plan documents need to be not only restated by then, but also certified by the IRS, and adopted by employers. Missing this deadline will force plans out of compliance and may result in IRS penalties.

Source: Bdo.com, July 2021

IRS Plays Musical Chairs With Voluntary Correction Programs

On July 16, 2021, the IRS published the latest EPCRS upgrade in Revenue Procedure 2021-30, in which, like musical chairs, some ground is gained while some is taken away. Here is a summary of some of the key changes.

Source: Eforerisa.com, July 2021

Missing Participants Matter: How to Overcome the Issue

CAPTRUST's Mike Webb provides an expert look at the problem of missing retirement plan participants. Armed with institutional insights on why it happens, why plan sponsors should care, and what they can do to break the cycle. Webb digs in on reuniting participants with their money.

Source: Captrust.com, July 2021

A Mid-Year Check-In for Retirement Plan Sponsors

Jennifer Doss and Scott Matheson provide a mid-year check-in on the retirement themes making headlines -- including environmental, social, and governance investing SECURE Act 2.0, and the double-edged sword of technology.

Source: Captrust.com, July 2021

IRS Releases Updated EPCRS Guidance

The IRS has released Revenue Procedure 2021-30, which contains long-awaited guidance updating the Employee Plans Compliance Resolution System. Plan sponsors use EPCRS to correct certain plan qualification failures. EPCRS is composed of the Self-Correction Program, the Voluntary Correction Program, and the Audit Closing Agreement Program, and there are several noteworthy changes.

Source: Ascensus.com, July 2021

New Escheatment Guidance for Qualified Plans

Most of the focus on missing participants has been with the DOL and its retirement plan audits, but over the last few years, the IRS also has been getting into the game with targeted guidance in this area. In this 4-page article, Groom Law principal Elizabeth Thomas Dold provides a review of this guidance in question and answer format.

Source: Groom.com, July 2021

The DOL-Approved Way to Handle Missing Participant Accounts

Although not considered formal guidance, it identifies prudent considerations for retirement plan administration that can minimize and mitigate the problems associated with missing participants while providing evidence of a company's efforts to comply with Safe Harbor standards. This guidance is less aimed at the solutions available once a participant is determined to be missing. Rather, it is intended to provide advice on ways plan sponsors can minimize or eliminate their incidences of missing participants, to begin with.

Source: Penchecks.com, July 2021

New EPCRS Rev. Proc. 2021-30

This revenue procedure updates the comprehensive system of correction programs for sponsors of retirement plans that are intended to satisfy the requirements of sections 401(a), 403(a), 403(b), 408(k), or 408(p) of the Internal Revenue Code, but that have not met these requirements for a while. This system, the Employee Plans Compliance Resolution System ("EPCRS"), permits Plan Sponsors to correct these failures and thereby continue to provide their employees with retirement benefits on a tax-favored basis. The components of EPCRS are the SelfCorrection Program ("SCP"), the Voluntary Correction Program ("VCP"), and the Audit Closing Agreement Program ("Audit CAP").

Source: Irs.gov, July 2021

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