Our January 2019 GT Benefits and Compensation Alert addressed the unprecedented level of potential liability for compliance failures in 401(k) and other retirement plans and the importance of performing a plan compliance review and correcting plan document or operational failures before an IRS auditor knocks on the door. Doing nothing and playing the audit lottery is no longer an acceptable risk, with one out of three employers (and half of large employers with at least 25,000 employees) likely to have their retirement plan audited by the IRS or DOL (See 2016 WillisTowersWatson Retirement Plan Governance Survey).
Fortunately, the IRS and DOL have programs allowing employer plan sponsors to perform compliance reviews and self-correct plan document and operational failures rather than requiring them to file a correction submission with the IRS or DOL for approval and paying fees or negotiating sanctions on audit.
The IRS has just released new self-correction procedures with the issuance of Revenue Procedure 2019-19, effective as of April 19, 2019, which increases the number and type of errors that can be self-corrected without filing and paying a fee.
To read the full GT Alert, click here.