On December 31, 2012, the IRS released Rev. Proc. 2013-12, updating the IRS correction program Employee Plans Compliance Resolution System or "EPCRS” which supports the establishment of administrative practices and procedures that ensure plans are operated properly.
This Revenue Procedure updates the programs that permit and encourage retirement plan sponsors to correct plan failures so that they may continue to provide their employees with retirement benefits on a tax-favored basis (e.g., errors that have prevented them from meeting Internal Revenue Code requirements under § 401(a), 403(a), and 403(b) of the "Code"). The voluntary correction program for correction by submission to the IRS requires fees based upon the number of participants in the plan.
Importantly for many TIAA-CREF institutions, this new Revenue Procedure was updated for the final 403(b) regulations, expanding the correction program to include 403(b) plan document and plan operational failures beginning January 1, 2009. 403(b) plan sponsors will now be able to correct failures to follow the terms of their 403(b) plan documents that occur after 2008.
Other update highlights include:
This Revenue Procedure was generally effective April 1, 2013, but plan sponsors were permitted to apply it to their plan corrections beginning January 1, 2013.