The Internal Revenue Service released updates to its Employee Plans Compliance Resolution System ("EPCRS") in Revenue Procedure 2021-30. Key changes to the EPCRS include:
- Extending the self-correction period for significant operational failures from two to three years, effective July 16, 2021;
- Eliminating the requirement that retroactive plan amendments for self correction benefit all plan participants, effective July 16, 2021;
- Eliminating the ability to make anonymous submissions but allowing anonymous no-cost pre-submission conferences to discuss potential VCP submissions, effective January 1, 2022;
- Extending the sunset date for the safe harbor correction method for missed deferral failures in plans with automatic contribution features from December 31, 2020 to December 31, 2023, effective January 1, 2021;
- Increasing from $100 to $250 the threshold for certain de minimis amounts that plan sponsors are not required to correct;
- Requiring that Audit CAP sanctions be paid using the Pay.gov website beginning January 1, 2022; and
- Expanding guidance on recoupment of overpayments.
Revenue Procedure 2021-30 is generally effective as of July 16, 2021, but, as noted above, certain changes are effective on other dates.
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