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401(k) Compliance Check Questionnaire Final Report - FAQs

What is the 401(k) Compliance Check Questionnaire?

The 401(k) Compliance Check Questionnaire was an online compliance check for the 1,200 randomly selected plan sponsors to complete. It was administered by the Employee Plans Compliance Unit (EPCU) and analyzed by TE/GE Research.

What is the purpose of the 401(k) Final Report?

The 401(k) Final Report, prepared by the IRS Tax Exempt and Government Entities Division (TE/GE), shares information from the 401(k) Compliance Check Questionnaire with the retirement plans community and other interested parties. 401(k) plans are the most common form of retirement plan in the United States. Currently, more than 500,000 401(k) plans cover approximately 60 million Americans.

What was the purpose of the 401(k) Compliance Check Questionnaire Project?

The key objectives were:

  • measure the health (overall compliance levels) of 401(k) plans,
  • identify the principal tax compliance issues affecting 401(k) plans,
  • evaluate the effectiveness of Employee Plans voluntary compliance programs and tools, and
  • determine how the IRS can foster greater compliance.

What is in the 401(k) Final Report?

The Final Report summarizes the results from the 401(k) Questionnaire responses received from a random sample of 401(k) plan sponsors that filed Form 5500 for the 2007 plan year. The findings are generalized to the 401(k) plan population that files Form 5500 and explains the sample selection and analysis methods.

Topics covered include employer and employee contributions, including automatic contributions arrangements; nondiscrimination testing; SIMPLE 401(k) plans; distributions and plan loans; trust assets; IRS correction, determination letter and education programs; and plan administration.

The Final Report also includes stratified data highlighting differences in the results based on plan size or the number of participants. The four strata in the report include plans with:

  • 0 – 5 participants (small),
  • 6 – 100 participants (medium),
  • 101 – 2,500 participants (large), and
  • 2,501 and more (very large).

Who received the Questionnaire and how did they provide their responses?

We randomly selected 1,200 section 401(k) plan sponsors and asked them to complete the 401(k) Questionnaire via a secure website. This was the first time TE/GE used an online compliance check questionnaire. Ninety-eight percent of the plans that received the questionnaire responded.

Responses to the 401(k) Questionnaire are as self-reported and have not been verified by the IRS.

What happened to non-responders?

IRS followed-up with all non-responders and examined the plans of all intentional non-responders.

What are the next steps?

We will use the Questionnaire’s findings to:

  • modify and improve our 401(k) plan compliance tools,
  • produce outreach materials,
  • improve voluntary compliance programs,
  • assess the need for additional guidance, and
  • define upcoming projects and enforcement activities
Page Last Reviewed or Updated: 23-May-2014