Back in the 1980s, I thought MacGyver could fix anything. Using everyday items, he invented ways to fix critical problems.
These inventions became synonymous with the character and became known as “MacGyverisms”. Just a little more than halfway through Season 1, for example, he had
- Disarmed a missile with a paper clip
- Raised a fallen I-beam with knotted fire hose filled with water
- Used a knife on a string to hook a towel
- Used a map and duct tape to patch hole in a hot air balloon
- Tied a hand held electric mixer in front of a cart wheel with rubber band around the wheel and a mixing bar to “motorize” the cart
Unfortunately, some three decades later there are no MacGyverisms to fix 403(b) plan problems. But the IRS has something even better. It’s called EPCRS which stands for the Employee Plans Compliance Resolution System, which is a correction program to fix mistakes and avoid the consequences of plan disqualification. EPCRS has three components:
- Self-Correction Program (SCP). The plan sponsor can correct certain plan failures with without contacting the IRS or paying any fee.
- Voluntary Correction Program (VCP). The plan sponsor can at any time before audit pay a fee and receive IRS approval for correction of plan failures.
- Audit Closing Agreement Program (Audit CAP). The plan sponsor pays a sanction and corrects a plan failure while the plan is under audit.
The takeaway from all of this is simply:
Don’t wait to get that letter from the IRS that they’ll be auditing your 403(b) plan. Take advantage of the IRS’ 403(b) Fix-It Guide which describes common mistakes, how to find them, how to fix them, and how to avoid them.
Internal controls, that’s the ticket.
Pop Culture Note: The legend of Angus MacGyver lives on in the form of streaming videos, DVDs, books, music, fan gear, and Mac-Gear including, yes, duct tape.