The Internal Revenue Service (IRS) has published a new voluntary correction program (VCP) Submission Kit for correcting contribution failures for money purchase pension plans (MPP) and target benefit pension plans.
The agency explains that MPP plans and target benefit plans are subject to the minimum funding standards of Internal Revenue Code (IRC) Section 412. If a plan sponsor did not make the required contributions to these plans in a timely manner, they did not operate their plan in accordance with its written plan document. A failure to operate the plan in accordance with its written terms is an operational failure that may result in the loss of the plan’s favorable tax treatment under the IRC. MPP or target benefit plans may correct the failure under the Employee Plans Compliance Resolution System (EPCRS) by making a submission to the VCP.
The kit includes a list of items to submit, instructions for completing forms and instructions for calculating the VCP submission fee. In addition, there is a list of frequently asked questions (FAQs).The VCP Submission Kit is here.