Skeletons In The Closet? Both the IRS and the DOL are Offering Compliance Assistance For Plan Sponsors Of 401(k)s
The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) will host a Webcast on Wednesday August 24 from 2 p.m. to 3:30 p.m EDT. The Webcast will highlight EBSA’s Voluntary Fiduciary Correction Program (VFCP). The VFCP is designed to help plan sponsors self-correct violations of the Employee Retirement Income Security Act (ERISA). Plan sponsors who use the VFCP can identify and fully correct certain transactions including, but not limited to:
- improper loans;
- delinquent participant contributions, and
- improper plan expenses.
The webcast will address the specific transactions for which the VFCP can be utilized and the application procedure. Notably, if an eligible party satisfies the terms of the VFCP the EBSA will issue a “no action letter”, meaning that the EBSA will not take civil enforcement action with respect to that violation. If you are working on a VFCP or believe you might need to in the future, click on this link to register for the free webcast: http://event.on24.com/r.htm?e=344713&s=1&k=8EE51BAE433EA4D7832EBF64F8555ECE.
The Internal Revenue Service (IRS) is also taking steps to assist plan sponsors of 401(k)s with compliance efforts. The Employee Plans Compliance Unit (EPCU) of the IRS conducts compliance checks of various plans. Recently the EPCU sent 1,200 compliance questionnaires to 401(k) plan sponsors and received a greater than 90% response rate (nonresponders were referred for full scope audits).
The EPCU is using the information gained from the questionnaires to issue a report on target voluntary compliance efforts, education and outreach needs, and potential enforcement activities. EPCU’s interim report is expected by September 30, 2011, with the final report expected in FY 2012. Check the IRS’ website in a few months for the interim report http://www.irs.gov/retirement/article/0,,id=223492,00.html, and get a head start on ensuring your plans’ compliance with the issues the EPCU’s report highlights.
If you have questions about these issues, contact Kathryn Cimera.Go to blog homepage >>