On March 2, 2017, the IRS released Employee Plan News Issue 2017-2. This edition includes multiple resources that employers can refer to for compliance assistance. One such resource is this year’s operational compliance list, which discusses the various regulations that the IRS will be proposing and finalizing during this fiscal year.
The issue also includes an article on self-correcting defective 403(b) plan provisions. 403(b) plan sponsors can correct these defective provisions during the remedial amendment period by adopting a pre-approved plan or by amending their individually designed plan. The article also includes five examples of available relief.
The IRS also provided a snapshot on catch-up contributions. As background, there are times when a participant may defer an amount in excess of the limits imposed under the IRC. These contributions are called catch-up contributions, and there are specific rules on who is eligible to make these contributions. In addition to discussing those rules, the snapshot gives examples of how the limits apply.
Another article in this issue discusses the substantiation guidelines for safe-harbor hardship distributions from 401(k) plans. Although written to be used by IRS examination employees, the guide gives valuable information concerning the circumstances under which the hardship distribution can be taken. Employers should review the guidelines to ensure that hardship distributions are administered appropriately.
Finally, the IRS included links to two YouTube videos on rollovers, Publication 560 (Retirement Plans for Small Business), and the Retirement Plan Reporting and Disclosure Guide.
Employers sponsoring retirement plans should familiarize themselves with the information provided in this issue, as it could prove helpful in the administration of the plan.
Employee Plan News Issue 2017-2