Qualified plans must continue to meet “Form” and “Operational” requirements in order to continue to retain their tax advantages. There are instances where, despite the best efforts, the plan falls short of ensuring each of these standards are met.  The type of correction needed in each instance will depend on the type and severity of the failure.

A skilled consultant who is licensed to represent plan sponsors before the IRS (or DOL) may be a valuable resource in fixing compliance defects in qualified and other tax advantaged plans.

When applying a fix to any issue, the process is consistent:

First, you must clearly define the failure.  This involves determining what should’ve happened, but didn’t; or conversely, what shouldn’t have happened, but did;

Second, you would explore the various alternatives available to get the plan as close to where it would’ve been had the failure not occurred.  In many instances, it may be a simple procedure like creating a plan document; or even creating a retroactive amendment.  Other cases may involve a situation where it would be impossible to get the plan to where it would’ve been had the failure not occurred.  In such instances, you’d determine a best approach and submit for IRS  approval under VCP;

Third, you would explain to the IRS the changes in procedures you are making to ensure that this failure doesn’t happen again.

This is pretty straight forward.  It is worth mentioning that many cases may be self-corrected without an IRS filing.  A determination must be made as to whether the type of violation “may” be ‘self-corrected’ under the Employee Plans Compliance Resolution System (EPCRS).  I offer free consultations to provide risk analysis of the errors to determine the scope of the correction needed.  All you have to do is contact me with a detailed explanation of your issue.