PLANSPONSOR - December 2021 - January 2022 - 11

Compliance Resolution System (EPCRS)
can now often be resolved by the sponsor
entirely online without interacting with
an agent, Dold says. Components of
the ECPRS include the Self-Correction
Program (SCP), the Voluntary Correction
Program (VCP) and the Audit Closing
Agreement Program (Audit CAP). Online
corrections might be for a miscalculation
for a hardship distribution or for using an
incorrect definition of compensation for
safe harbor testing.
" You fill out the forms on the website
and submit your proposed correction, "
says Sonneberg. " [The IRS staff] generally
offer their blessing if it's a reasonable
correction and makes the participants
whole again. "
VCP applications, the most common,
typically take about four months to
process, maybe longer if there are issues
with the compliance statement, Dold says.
New rules from the IRS will no longer
permit a company to submit a VCP anonymously,
though this is possible for a preconference
procedure.
Determination Letters
For more complicated issues, plan sponsors
have several possible routes to
get IRS help. For questions related to,
for instance, avoiding problems when
starting a new plan, terminating an
existing one or merging two plans, plan
sponsors might request a determination
letter, says Michael Wieber, a partner with
Quarles & Brady LLP. This, according to
the IRS website, costs $275. The IRS
recently changed the requirements,
allowing sponsors and their advisers to
apply for letter rulings and determination
letters electronically.
" Those are more focused on the
language of the documents themselves,
as opposed to interpretations or facts
that may not be accurately stated or may
change over time, " Wieber says.
To receive a determination letter,
a plan sponsor will need to submit a
complete statement of the facts and a
detailed description of the transaction. In
general, the IRS will not provide a ruling
on one step of a larger transaction, preferring
to rule on the overall matter instead,
according to the IRS website.
Plan sponsors with preapproved
documents may request an opinion letter,
in which the IRS essentially affirms that
a plan's format is acceptable and satisfies
the legal minimums for what a document
should look like, Wieber says. " That gives
the plan sponsor comfort that if it starts
from this place and fills in the blanks,
the document will meet the technical
requirements. "
Fixing Mistakes
More common than questions about
new plans, however, are questions about
compliance resolution for plans that have
failed somehow and do not qualify for the
VCP program.
" If the method of correction is
unclear or there are multiple ways you
might reasonably correct something, you
can get the IRS to rule on your correction
method through a private letter ruling
[PLR], " Wieber says. In that case, the
IRS is making a specific judgment on a
specific situation. PLRs are helpful to plan
sponsors, but they are pricey, he notes.
According to the IRS website, depending
TIDBITS
Single-Employer Program
Keeps Improving
The Pension Benefit Guarantee Corporation's
single-employer-plan insurance program
saw a year-over-year gain, with assets of
$150.7 billion and liabilities of $119.8 billion
as of Q3 2021, the agency says. The positive
net position of $30.9 billion reflects an
increase of $15.4 billion from the program's
$15.5 billion net position in fiscal year 2020.
PLANSPONSOR.COM December 2021 - January 2022 11
on the issue addressed, a sponsor could
owe $5,000 to $38,000. PLRs can also
take months or a year to complete, causing
significant problems for a plan that has an
immediate issue or question, Wieber says.
" That's a lot of money and a big
commitment, " says Dold. " So most people
ask whether there's another avenue. "
In those instances, sponsors will
need to discuss with their lawyer whether
it makes sense to go through the PLR
process, or to simply make their best good
faith decision and move forward.
" I can't tell clients that do that that
there's no risk, " Wieber says. " But most
employers are taking bigger risks every
day in their business. This is about taking
a reasonable position based on what's out
there. "
Sponsors that go this route should
document the decisionmaking process,
including by getting an opinion letter from
an attorney. That can go a long way toward
protecting them if there is a fiduciary
claim and also to show the IRS that they
were attempting to do the right thing.
" Even if the IRS ultimately disagrees
with you, you may be able to avoid or
reduce penalties and interest by showing
that you were trying to be prudent in your
approach, " Wieber says. -Beth Braverman
http://www.PLANSPONSOR.COM

PLANSPONSOR - December 2021 - January 2022

Table of Contents for the Digital Edition of PLANSPONSOR - December 2021 - January 2022

INSIGHTS
RULES & REGULATIONS
UPFRONT
ESG Interest Piqued
2021 Best in Class DC Providers
Ramping Up Offerings
Annuities Still Misunderstood
Student Loan Repayment
FIDUCIARY FORUM
INSIDE ANGLE
PLAN PROFILE
PLANSPONSOR - December 2021 - January 2022 - Cover1
PLANSPONSOR - December 2021 - January 2022 - Cover2
PLANSPONSOR - December 2021 - January 2022 - 1
PLANSPONSOR - December 2021 - January 2022 - 2
PLANSPONSOR - December 2021 - January 2022 - 3
PLANSPONSOR - December 2021 - January 2022 - INSIGHTS
PLANSPONSOR - December 2021 - January 2022 - 5
PLANSPONSOR - December 2021 - January 2022 - RULES & REGULATIONS
PLANSPONSOR - December 2021 - January 2022 - 7
PLANSPONSOR - December 2021 - January 2022 - 8
PLANSPONSOR - December 2021 - January 2022 - 9
PLANSPONSOR - December 2021 - January 2022 - UPFRONT
PLANSPONSOR - December 2021 - January 2022 - 11
PLANSPONSOR - December 2021 - January 2022 - 12
PLANSPONSOR - December 2021 - January 2022 - 13
PLANSPONSOR - December 2021 - January 2022 - 14
PLANSPONSOR - December 2021 - January 2022 - 15
PLANSPONSOR - December 2021 - January 2022 - ESG Interest Piqued
PLANSPONSOR - December 2021 - January 2022 - 17
PLANSPONSOR - December 2021 - January 2022 - 18
PLANSPONSOR - December 2021 - January 2022 - 19
PLANSPONSOR - December 2021 - January 2022 - 2021 Best in Class DC Providers
PLANSPONSOR - December 2021 - January 2022 - 21
PLANSPONSOR - December 2021 - January 2022 - 22
PLANSPONSOR - December 2021 - January 2022 - 23
PLANSPONSOR - December 2021 - January 2022 - 24
PLANSPONSOR - December 2021 - January 2022 - 25
PLANSPONSOR - December 2021 - January 2022 - 26
PLANSPONSOR - December 2021 - January 2022 - 27
PLANSPONSOR - December 2021 - January 2022 - 28
PLANSPONSOR - December 2021 - January 2022 - 29
PLANSPONSOR - December 2021 - January 2022 - Ramping Up Offerings
PLANSPONSOR - December 2021 - January 2022 - 31
PLANSPONSOR - December 2021 - January 2022 - 32
PLANSPONSOR - December 2021 - January 2022 - 33
PLANSPONSOR - December 2021 - January 2022 - Annuities Still Misunderstood
PLANSPONSOR - December 2021 - January 2022 - 35
PLANSPONSOR - December 2021 - January 2022 - Student Loan Repayment
PLANSPONSOR - December 2021 - January 2022 - 37
PLANSPONSOR - December 2021 - January 2022 - FIDUCIARY FORUM
PLANSPONSOR - December 2021 - January 2022 - INSIDE ANGLE
PLANSPONSOR - December 2021 - January 2022 - PLAN PROFILE
PLANSPONSOR - December 2021 - January 2022 - Cover3
PLANSPONSOR - December 2021 - January 2022 - Cover4
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