The IRS issued guidance with helpful information for employers sponsoring 401(k) plans, and other retirement plans, by making it easier for employers to correct certain kinds of administrative errors involving the plans. The guidance is a must read for employers of all sizes.
Employers should discuss the guidance with ERISA counsel, perhaps by having counsel present on the topic at the next 401(k) committee meeting.
IRS Notice 2023-43 provides interim guidance on the expansion of the Employee Plans Compliance Resolution System (EPCRS) under Section 305 of SECURE 2.0.
Among other things, the guidance notes that a plan sponsor may self-correct certain eligible inadvertent failures pursuant to EPCRS correction principles, including those relating to loans.
The guidance also provides additional color on what internal processes are considered a specific commitment to implement the self-correction of an eligible inadvertent failure (necessary if the plan is under examination and wants to self-correct) and further provides that “the mere completion of an annual compliance audit or adoption of a general statement of intent to correct failures when they are discovered are not actions demonstrating a specific commitment to implement the self-correction of an identified failure”
The IRS invites comments on Notice 2023-43 and any other aspect of Section 305 of SECURE 2.0, which should be submitted in writing on or before August 23, 2023. Notice 2023-43 will be published in Internal Revenue Bulletin (IRB) 2023-24 on June 12, 2023.