Compliance hurts, but ERISA & IRS penalties will hurt even worse
Toughened penalties mean increased urgency to monitor the routine plan processes that create operational risks.
By Christina M. Crockett|April 10, 2018 at 02:29 PM|The original version of this story was published on Corporate Counsel
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Just after the New Year, the United States Department of Labor (DOL) issued a final rule increasing ERISA’s noncompliance penalties.
In Department of Labor Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2018, 83 Federal Register 7 (Jan. 2, 2018), the DOL announced the annual adjustments that apply to penalties assessed after Jan. 2 for certain violations that occurred after Nov. 2, 2015. On the same day, the Internal Revenue Service (IRS) released Revenue Procedure 2018-4 which revamps the user fee schedule for qualified plan failures submitted to the IRS Voluntary Correction Program (VCP) for compliance statements pursuant to the Employee Plans Compliance Resolution System (EPCRS), set out in Revenue Procedure 2016-51. The IRS announcement is especially significant because the Revenue Procedure eliminates reduced fees for common compliance errors in qualified plans like 401(k) plans and defined benefit plans.
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