The IRS has made important changes to the Employee Plans Compliance Resolution System (EPCRS), which allows employers that sponsor 401(k)-style defined contribution plans or defined benefit pension plans to self-correct plan operational errors.
Unless properly corrected, some errors may result not just in penalty fees but in the loss of a retirement plan’s favored tax status under the Internal Revenue Code.
On July 16, the IRS issued Revenue Procedure 2021-30, which supersedes the previous EPCRS guidance, Revenue Procedure 2019-19. Under this latest EPCRS upgrade, “like musical chairs, some ground is gained while some is taken away,” observed Christine P. Roberts, an employee benefits attorney with Mullen & Henzell in Santa Barbara, Calif.
