Retirement plans can get get pretty complicated also, but "fixing" one doesn’t necessarily have to be.
That’s the focus of the recent IRS announcement reaching out to employers who did not timely amend their Plans for EGTRRA. Here’s the background.
Most retirement plans had to be amended and restated no later than April 30, 2010 to comply with the 2001 tax law, The Economic Growth and Tax Relief and Reconciliation Act. That law “acronymized” to EGTRRA made significant changes to the Internal Revenue Code as it affected retirement plans.
(See our EGTRRA Restatement Series and last year’s Benefit Briefing, Why a Law Passed in 2001 Is So Important To Plan Sponsors in 2010).
Why was meeting the April 30, 2010 deadline so important? A Plan can lose its tax qualified status if the plan sponsor fails to make required plan amendments on a timely basis.
If April 30, 2010 has come and gone for those employers who didn’t timely amend, the IRS has the Voluntary Correction Program through which employers can correct this plan document failure. The IRS is encouraging employers to take advantage of this program by offering a discounted fee of 50% but only until April 30, 2011.
For the details, here is a link to the IRS Voluntary Correction Submission Program for plan sponsors who missed the April 30, 2010 EGTRRA restatement details.