Compliance November 23, 2011

IRS Gives Update on 401(k) Questionnaire Project

Over 95% of the 1,200 plan sponsors contacted by the Employee Plans Compliance Unit of the IRS voluntarily completed an online 401(k) Compliance Check Questionnaire.
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The Internal Revenue Service (IRS) initiated examinations on the plans of sponsors who didn’t answer the questionnaire and collected the questionnaire data during the examination (see “Non-Responders” to IRS Questionnaire May be Examined“). The agency will post an interim report soon to www.irs.gov/retirement. The final report will be completed by the end of FY 2012 and the IRS will announce when it’s posted on the website.

According to the agency, the questionnaire data will be used to improve its web-based tools and guidance, including the Employee Plans Compliance Resolution System; enhance its compliance strategies; improve voluntary compliance through education and outreach efforts and, where appropriate, expand enforcement activities.

The project was started in May 2010 (see “IRS Provides 401(k) Questionnaire Details“), and the survey sought plan information on:

  • Demographics
  • Participation
  • Employer and employee contributions
  • Top-heavy and nondiscrimination testing
  • Distributions and plan loans
  • Other plan operations
  • Automatic contribution arrangements
  • Designated Roth features
  • IRS voluntary compliance and correction programs
  • Plan administration

More information on the project is at http://www.irs.gov/retirement/article/0,,id=223440,00.html.

 

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