Recently, the IRS released an updated version of Form 14568 (Model VCP Compliance Statement), intended for use in connection with filing voluntary correction program (“VCP”) submissions with the IRS under the latest version of its Employee Plans Compliance Resolution System (“EPCRS”) program. Generally stated, VCP is one of three programs under EPCRS, and, unlike self-correction, it requires advance submission to the IRS for its approval as to the proposed method of correction of a potential plan qualification defect.
Under VCP, plan sponsors submit Form 14568 along with various additional materials which, in the aggregate, provide the IRS with necessary information on which to determine whether a proposed correction method is acceptable. The form includes descriptions of the failures and proposed correction methods, proposed procedures for notifying former employees and beneficiaries of the correction, and proposed changes to plan administrative procedures to help ensure that similar failures do not occur in the future.
The changes made to Form 14568 are relatively minor and primarily consist of updates to information and references to the official IRS EPCRS Revenue Procedure and other pertinent guidance, while eliminating obsolete references and items.
Electronic Submission. As in the past, VCP submissions – including submission of Form 14568 – must be made electronically, using Form 8950. All corrections under VCP must follow the electronic filing and submission requirements contained in Revenue Procedure 2019-19. The IRS has a helpful summary of this Revenue Procedure available on its website. Finally, Form 14568 and related forms can also be found on the IRS Correcting Plan Errors—Fill-in VCP Forms webpage.
The information and content contained in this blog post are for general informational purposes only, and does not, and is not intended to, constitute legal advice. As always, for specific questions regarding your 401(k) plan, including plan corrections and all other compliance issues, please consult your own ERISA attorney or advisor.