IRS 2019 Operational Compliance List
IRS 2019 Operational Compliance List
The IRS issued guidance per Revenue Procedure 2016-37 on several key regulations that will be enforced in 2019, many of which will affect the administration of qualified plans. The guidance aims to help retirement plan sponsors identify any mandatory or discretionary plan amendments needed for their plans. Key provisions of the guidance, which most notably pertains to hardship distribution rules, include:
- Changes to hardship distribution rules following enactment of the Bipartisan Budget Act of 2018
- Prohibition of retirement plans from suspending participant 401(k) deferrals as a condition of obtaining a hardship distribution
- A revised list of reasons for qualifying for a hardship distribution
- An extension of retirement plan relief for victims of FEMA-designated natural disasters
Retirement plan administrators should consult their third-party administrators or service providers to inquire about required or discretionary amendments to plan provisions.
Voluntary Correction Program Goes Electronic
The IRS recently issued updated instructions that modify the Employee Plans Compliance Resolution System (EPCRS). Beginning on April 1, 2019, all submissions to the Voluntary Correction Program (VCP) must be made online using pay.gov.
Through VCP, retirement plan sponsors and administrators can correct significant operational retirement plan failures. (Insignificant plan errors, on the other hand, can be reported under the Self-Correction Program).
Employers voluntarily report plan-related errors and remit an associated fee (determined by the severity of the error and the number of participants affected).