When mistakes are made with respect to a qualified plan, one option that is available to a plan sponsor is the Voluntary Correction Program (VCP) under the Internal Revenue Service (IRS) Employee Plans Compliance Resolution System (EPCRS) to fix the mistakes. To encourage employers who sponsor 401(a) qualified retirement plans and 403(b) plans to correct plan failures, the IRS has announced in Revenue Procedure 2016-8 that user fees for the VCP are being reduced. Beginning February 1, 2016 the fees for VCP submissions, outside of special situations, will be as follows:
|Number of Participants||Reduced Fee as of February 1, 2016||Fee prior to February 1, 2016|
|20 or fewer||$500||$750|
|101-1,000||$5,000||$5,000 (101-500 participants)|
|$8,000 (501-1,000 participants)|
|1,001-10,000||$10,000||$15,000 (1,001-5,000 participants)|
|more than 10,000||$15,000||$25,000|
The IRS will not apply the reduced fees or issue refunds for VCP submissions made prior to February 1, 2016. In addition to the reduction mentioned here, certain submissions remain eligible for a separate reduced fee outside of what was announced in the Procedure. VCP fees for other types of plans remain unchanged. To learn more about how VCP may benefit you, please contact your Nyhart consultant for more information.