Retirement Planning
Retirement Plan Correction & Remediation: Finding the Error Is Only the Beginning
Retirement plan failures should be classified correctly, corrected under the applicable IRS or DOL framework, documented, and followed by a root-cause fix so the error does not recur.
Retirement-plan errors should trigger a remediation analysis, not an assumption that the plan or deduction is permanently lost. The correction path depends on the plan type, failure, timing, affected participants and whether IRS or DOL jurisdiction is involved.
Define the failure precisely
Missed deferrals, late deposits, eligibility failures, document defects, excess contributions and operational failures do not share one correction method. Identify who was affected and for which plan years.
Separate IRS qualification from DOL fiduciary issues
EPCRS addresses many tax-qualification failures. DOL programs such as VFCP and DFVCP address different fiduciary or filing problems. One correction program does not automatically resolve the other agency’s issue.
Self-correction has conditions
SECURE 2.0 expanded statutory self-correction concepts, with IRS interim guidance including Notice 2023-43. Verify the current EPCRS revenue procedure and subsequent guidance before relying on self-correction.
Correction means restoring participants, not hiding the error
A sound correction aims to place the plan and participants as close as reasonably possible to the position they would have occupied absent the failure, consistent with the applicable program.
Fix the process that caused the error
Document root cause, corrective contribution/calculation, notices, filings and the operational change designed to prevent recurrence. Remediation is incomplete if the same control weakness remains.
Planning takeaway
Finding the error is only the beginning.
Classify the failure, identify the correct IRS/DOL path, restore affected participants and document the control change that prevents recurrence.