Fall 2010 issue of Horizons

limitation year for all employer sponsored defined contribution plans is $49,000, excluding catch-up contributions for a participant age 50 or older. There are remedies to correct each of the items, but there is also a cost. Generally the IRS could disqualify a plan if there is a mistake or “defect” as they call it. However, the IRS encourages compliance so they can avoid adverse consequences that may result to the employer, the plan and participants. As a result, the IRS established an amnesty program called the Employee Plans Compliance Resolution System to enable plan administrators to self correct plan defects. The general rule to correct a defect is to make the participant whole and put him/her in the position he/she would have been if the mistake didn’t happen. The correction must also include any lost earnings from the date of the mistake through the date of the correction.

The IRS program includes certain situations for which errors can be self corrected without any filing or submission of information to the IRS. Keeping retirement plans in compliance with all the requirements will enable you to avoid the time, hassle and cost of correcting plan defects at a later date. For more information on ways RubinBrown can assist you and your business, please contact us.

RubinBrown’s Benefits Group

Brian Frevert, CPA, CFP, MBA Partner RubinBrown Wealth Management Group brian.frevert@rubinbrown.com 303.698.1883

Wayne Isaacs, JD, CPA, CEBS Manager-In-Charge RubinBrown Benefits Group wayne.isaacs@rubinbrown.com 314.290.3493

Bob Merenda, CPA Partner-In-Charge

Chip Harris, CPA Partner-In-Charge RubinBrown Plan Audit Services Group chip.harris@rubinbrown.com 913.499.4426

RubinBrown Wealth Management Group robert.merenda@rubinbrown.com 314.290.3236

www.rubinbrown.com

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