Employee Benefits -IRS Reminds Us That Voluntary Correction Program Fee Discount for Non-amenders Of Pre-Approved Plans Ends May 2

For many plan sponsors using a pre-approved 401(k), profit-sharing, money purchase or other defined contribution plan document, the deadline for adopting an EGTRRA plan was April 30, 2010. If the plan sponsor failed to adopt an EGTRRA plan by that date, the sponsor may correct this failure under the IRS’s Voluntary Correction Program (“VCP”).

The IRS’s Employee Plans News, dated February 11, 2011, reminds us that, if the plan sponsor files an application under the VCP to correct the non-adoption failure by May 2, 2011, a discounted filing fee may be available.

For example:

A discounted fee of $375 (half the usual fee) applies to a plan sponsor who:
• files a VCP application on or before May 2, 2011 (postmarked within one year of the missed deadline);
• has 20 or fewer participants in their plan; and • had no other plan qualification failures.

The VCP fee for these plans will be $750 after May 2.