Need to fix issues with your employee retirement plan? IRS just updated its procedures on retirement plan corrections.
Staying in compliance
So your company remains in compliance when making retirement plan corrections, check out some of the key changes:
- New guidance for recouping overpayments to a plan. As long as a defined benefit plan meets certain funding criteria, employers won’t have to reimburse the plan for the full amount of the overpayment.
- An extension of a safe harbor provision that’s part of the Self-Correction Program. So now it runs through Dec. 31, 2023.
- An expansion of the self-correction period for resolving significant operational failures in a plan and failures with plan documents to three years, and
- A higher de minimis amount for having to make corrections on a participant’s behalf is now $250 (from $100).
Note: Most changes are effective as of July 16, 2021.