Last week at the Mid-Atlantic Pension Liaison Meeting in Philadelphia, Lou Leslie, Tax Law Specialist with the IRS, gave a preview of some of the new guidance coming out soon pertaining to EPCRS (the Employee Plans Compliance Resolution System). He gave the following list of Top Ten Failures in VCP:
1. Failure to properly amend the plan within the remedial amendment period for legislation that was enacted
2. Failure to follow the plan’s definition of compensation for determining contributions
3. Failure to include all eligible employees in the plan
4. Failure to satisfy the loan provisions of the plan
5. Violation of the in-service distribution requirements
6. Violations of Code section 401(a)(9) pertaining to required minimum distributions
7. An employer eligibility failure, i.e. improper entity adopting a type of retirement plan
8. Failure to comply with ADP/ACP testing (sometimes due to a failure to follow the proper definition of compensation)
9. Failure to make a top-heavy minimum contribution
10. Code section 415 violations