IRS Expands Self-Correction Program: What Plan Sponsors Need to Know About the Interim Guidance
The IRS has made it easier for retirement plan sponsors to fix common plan mistakes without going through a formal filing process. Under interim guidance in Notice 2023-43, sponsors can now correct a broader range of errors internally -- saving time, cost, and administrative hassle. This expanded self-correction relief, part of the SECURE 2.0 Act, is available immediately and gives plan sponsors more flexibility, provided that certain conditions are met. Expanded Self-Correction Authority Now in Effect Effective immediately and continuing until Rev. Proc. 2021-30 is formally updated, plan sponsors may self-correct “eligible inadvertent failures,” including some plan loan failures, under the interim framework. This expansion covers certain failures that previously required formal correction through the Voluntary Correction Program (VCP), which required filing with the IRS and paying a user fee. Conditions for Self-Correction of Eligible Inadvertent Failures To self-correct under the ex...