Relaxed IRS Self-Correction Rules a Boon for Plan Sponsors—and an Opportunity to Correct Failures Now

Summary

On July 16, 2021, the Internal Revenue Service (IRS) released Revenue Procedure 2021-30, which made several important changes to the Employee Plans Compliance Resolution System (EPCRS) and expanded the ability of plan sponsors to correct certain compliance failures under their retirement plans. This LawFlash discusses how plan sponsors can leverage the relaxed rules for retroactive plan amendments to more easily effect compliance corrections during a period of heightened audit scrutiny. In addition, plan sponsors using preapproved defined contribution plan documents should pay particularly close attention to the provisions selected in the restated plan documents currently being prepared for their plans to help avoid future operational compliance failures.