IRS Correction Program Updated and Expanded

As employers are generally aware, mistakes and errors in maintaining tax-qualified pension plans, such as 401(k) plans, are easy to make. For the past few years, the Internal Revenue Service (IRS) has offered ways to correct operational and administrative errors under the Employee Plan Compliance Resolution System (EPCRS), including those that might jeopardize plan qualification. The EPCRS is updated periodically, the most recent being Rev. Proc. 2003-44 (Update). The Update makes a number of significant changes that provide clearer guidance to those choosing to use the EPCRS. The changes are generally effective as of October 1, 2003, but employers may choose to apply them on or after June 5, 2003.