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Employee Plans Compliance Unit (EPCU) - Completed Projects - Voluntary Compliance Follow-Up

Voluntary Compliance Follow-up Project Summary

Employee Plans Compliance Unit

Background

The Employee Plans Compliance Unit (EPCU) conducted a project to determine if the terms of the compliance statements agreed to by the Voluntary Compliance staff and plan sponsors had been satisfied. Each plan accepted into the Voluntary Correction Program (VCP) received a compliance statement which outlined the failures identified by the plan sponsor, the terms of correction including any revision of administrative procedures, and the time period which the proposed corrections must be implemented. The compliance statement is conditioned on these items.

There are various types of qualification failures, the two types the EPCU focused on were: plan document failures and operational failures. The EPCU compliance letters were developed to identify:

  1. If the plan sponsors had made correction in accordance to their compliance statements;
  2. If the corrections were made timely; and/or
  3. If the administrative procedures were revised.

Results 

The Voluntary Compliance Follow-up Project began in July of 2005 and ended in September of 2007. This project involved coordination in obtaining copies of the compliance statements from specialists in the Voluntary Compliance Group. During the course of this project, all the records in the sample were not readily available. The sample size was adjusted and the chart below reflects the results of the available cases which involved contact with the plan sponsors.

Contact Closure Results

 Type of Closure

Number of Cases 

 Percentage

 Conditions of Compliance Statement Verified
- Through Contact

 55

 71%

 Violation of Compliance Statement
 or Other Noncompliant Issue

 15

 29%

 Totals

 70

100% 

In the table above the majority of the noncompliant issues were due to not making the proposed correction within 150 days from the date the statement was issued. The other noncompliant issues involved:

  • Securing an amended Form 5500
  • Securing a delinquent Form 5500
  • A correction to a possible future operational practice
  • A referral for a field audit

In some cases, the compliance statement was reviewed and the necessary corrections were verified without contacting the plan sponsor. The chart below represents the cases in the initial sample that did not receive a contact letter from the EPCU. 

Non-Contact ClosureResults

 Type of Closure

Number of Cases 

 Percentage

 Conditions of Compliance Statement Verified
- No Contact Made

 48

 53%

 Compliance Statement
Not Available

 43

 47%

 Totals

 91

100% 

In total, there were 28 cases closed in this project which had compliance statements issued for document failures and 133 cases closed in this project which had compliance statements issued for operational failures.

Page Last Reviewed or Updated: 30-Sep-2013