New IRS Tool Helps Keep Your 401(k) Plan Compliant

The IRS has launched a new web-based tool to help 401(k) plan sponsors identify, correct, and avoid common errors. The tool, “401(k) Plan Potential Mistakes,” includes a chart that identifies 11 problem areas in retirement plans, including:

• plan document updates;
• plan operation;
• definition of compensation;
• nondiscrimination test failures; and
• excess deferrals.

The chart leads you to a series of questions, tips, and examples that can help you pinpoint potential errors. And if you uncover a mistake, it describes the various correction programs available under the Employee Plans Compliance Resolution System and includes an explanation of how to correct the mistake. The chart also provides tips on avoiding the mistake to facilitate ongoing and future plan compliance.