Rev. Proc. 2021-30 (EPCRS Update)
Charles C. Shulman, Esq.
Rev. Proc. 2021-30 updates the IRS Employee Plans Compliance Resolution System (EPCRS) Program, with the following changes to the EPCRS program:
(i) the end of the self-correction period for significant failures is extended by an extra year;
(ii) an anonymous VCP with a free VCP pre-submission conference procedure is provided instead of John Doe applications;
(iii) the plan sponsor can correct an operational failure under SCP by retroactive plan amendment if the amendment will result in an increase of a benefit, right or feature (BRF) is allowed even if such BRF is not available to all eligible employees, provided the benefiting group satisfies the IRC's nondiscrimination rules;
(iv) it extends by three years the sunset of the safe harbor correction method for employee elective deferral failures associated with missed elective deferrals for participants who have an automatic contribution feature to December 31, 2023;
(v) it expands the de minimis exception from the requirement to seek recovery from overpayment recipients for small overpayments with such amount being increased from $100 to $250;
(vi) it allows entering into payment agreements with participants who were overpaid; and
(vii) it includes two new benefit overpayment correction methods for defined benefit plans that encourage employers to avoid seeking recoupment of benefit overpayments made to participants which are based on a plan’s funding status by either not requiring correction if the specified funding levels are met (the funding exception contribution method) or by limiting the amount to be recouped under certain circumstances (the contribution credit correction method).
If you have any questions, please contact Charles at firstname.lastname@example.org or at 201-357-0577