Retirement Plans: Automatic Enrollment Guidance to be Issued & 457(b) Plans Under IRS Scrutiny
Automatic Enrollment Guidance to be Issued
The last time the Employee Plans Compliance Resolution System (EPCRS) was updated under Revenue Procedure 2013-12, it failed to provide additional correction procedures for common mistakes made in administering automatic enrollment and automatic escalation provisions in Section 401(k) and Section 403(b) plans. The Treasury Department is working on guidance for correcting retirement plan automatic enrollment errors as a separate project and plans to issue this guidance before publishing its next comprehensive update of employee plans voluntary correction procedures, a Treasury official said on June 5th.
457(b) Plans Under IRS Scrutiny
The Employee Plans Compliance Unit of Internal Revenue Service will embark on a compliance check project focused on 457(b) plans. The IRS’s focus will be on finding compliance irregularities related to funding, loans, catch-up contributions, and plan sponsor eligibility. According to the IRS announcement, the compliance check will not involve the inspection of books and records for any tax liability. If the IRS finds that a plan has not been established or operated in accordance with Section 457(b), it will inform the sponsor about next steps, which might include a plan audit or a correction submission under IRS’s Voluntary Correction Program. The IRS expects to send questionnaires to about 200 organizations in fiscal year 2013, and another 200 in fiscal year 2014.