IRS Releases VCP Submission Kit for Failure to Adopt Pre-Approved Retirement Plans
February 5, 2019
On Jan. 31, 2019, the IRS released a Voluntary Compliance Program (VCP) Submission Kit for plan sponsors that failed to adopt an updated pre-approved defined contribution (DC) plan. As background, DC plan sponsors were generally required to update their plan document by April 30, 2016, to reflect the changes imposed by the Pension Protection Act. If plan sponsors failed to do so, their plan is no longer entitled to tax-favored treatment.
However, plan sponsors that failed to adopt an updated plan can restore their plan’s tax-favored status by adopting an updated plan document and filing a VCP submission. The submission kit describes the process by which plan sponsors can file their submission. Specifically, it details the steps to take, lists the required documentation and forms, and discusses fees. Additionally, the guidance outlines what will happen after the submission is filed.
DC plan sponsors that have not filed an updated pre-approved plan document should consult with their advisers about whether they should file for the VCP relief.
VCP Submission Kit »