FIS Relius

Mistakes happen. Unfortunately, they happen all the time, even to well-run plans. Fortunately, the IRS has provided step by step guidelines to correct the most common errors. Sometimes, there are alternative methods to dealing with a problem and it can be confusing to determine the best approach.

This 6-parts Web Series will provide an in-depth approach to plan correction. Each week, we will look at a specific problem or set of related problems, consider how the errors could have been prevented, and walk you step-by-step through correction techniques. These programs will not provide generalized theories. Instead, each will focus on specific plan failures and how to address them on a day-to-day basis. Webcasts will include:

1. Elective deferral failures: too easy to fail
2. Plan document failures: fix them before the price goes u
3. Allocation mistakes for employer contributions
4. Distribution failures: too much, too little, too soon, too late
5. Plan loan failures: even if the plan didn’t make a mistake
6. Testing failures: ADP/ACP, 415, 402(g)

Practical Corrections Series 01: Elective Deferral Failures: Too Easy To Fail

There are too many ways make mistakes in handling elective deferrals including:

• Participants enter too soon or too late
• Participants aren’t told about deferral opportunity
• Payroll mishandles deferral election forms
• Payroll misunderstands compensation definitions (what can you defer from)
• Employer makes errors in handling automatic enrollment/automatic escalation

If the plan has matching contributions, the effect of a deferral error can be compounded.

Fortunately, the IRS has detailed procedures for addressing these failures. The IRS recently updated those procedures to make correction more cost effective if handled timely and with proper notice. This seminar will review both correction procedures, both new and old, and discuss the steps an employer can take to avoid future deferral problems.

Topics include:

• Elective deferral failures defined
• Improper exclusions
• Auto escalation issues
• Revenue Procedure 2015-28
• Approved correction methods
• New notice requirements
• "Traditional" EPCRS correction methods
• Proper elective deferral procedures

There are no prerequisites or other advanced preparation for this program. The speaker will assume attendees have a basic familiarity with the elective deferral procedures and EPCRS. Attendees should have one year of experience.

Instructional Delivery Method
Group – Internet-Based

NASBA Field of Study: Taxes

Objectives: After participating in this program, an attendee should be able to:

• Identify the various types of elective deferral failures
• List and apply the approved correction methods available under EPCRS
• Determine the best correction method for a given failure
• Identify prudent elective deferral procedures

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