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Self-Correction of Retirement Plan Errors

You can self-correct many retirement plan errors without contacting the IRS or paying a fee. There are no application or reporting requirements.

Self-correction, also known as the Self-Correction Program or “SCP,” is authorized under Revenue Procedure 2013-12, the revenue procedure that governs the Employee Plans Compliance Resolution Program (EPCRS).

You can self-correct an insignificant operational error at any time to preserve the tax-favored status of your plan. An operational error occurs when you don’t follow the written terms of the plan. Even where the operational error is significant, you may still be able to self-correct if action is taken in a timely manner.

Availability and Timing of Retirement Plan Self Correction

Type of failure	Type of plan	Self-correction available?	When must self-correction be completed?
Insignificant operational	Any	Yes	At any time
Significant operational	401(k), profit-sharing or other qualified plan 403(b) plan	Yes	before the end of the second plan year after the failure occurred, or substantially corrected within a reasonable time
Significant operational	SIMPLE IRA plan SEP plan	No	N/A – Use VCP
Related to plans acquired in corporate mergers	Special rule	Yes	substantially corrected before the end of the plan year beginning after the business transaction allowed even if failure occurred more than two plan years earlier
ADP or ACP test violations	Special rule	Yes	substantially corrected before the end of the second plan year following the plan year that includes the last day of the additional period for correction permitted under IRC Sections 401(k)(8) or 401(m)(6)
Egregious	Any	No	N/A – Use VCP

More on self-correcting plan errors:

Additional resources

Learn more about how to correct plan errors

Page Last Reviewed or Updated: 2013-03-22