The IRS has announced that its Employee Plans Compliance Unit (“EPCU”) will be mailing out a letter and instructions to a random sample of 1,200 employers that filed a Form 5500, Annual Return/Report of Employee Benefit Plan, for the 2007-plan year. These selected 401(k) plan sponsors will be asked to complete a “401(k) Compliance Check Questionnaire” via a secure, easy-to-use website.
The questionnaires purpose is to gain a better understanding of why 401(k) plans are the most non-compliant plan type in the retirement plan spectrum. This detailed examination of 401(k) plans is expected to bring to the surface potential compliance issues, the reasons for noncompliance and potential plan operational issues which will assist the IRS in fine-tuning its efforts to improve future compliance as well as help them determine where best to focus their enforcement efforts.
All plan sponsors will complete the same questionnaire however; there are some questions that only pertain to certain plans. According to the IRS, this is merely a compliance check. It is not an audit or an investigation; however, employers that fail to respond to the questionnaire or provide complete information will result in further action or examination of their plan.
If you receive a letter to complete the questionnaire and need assistance, we are here to help. As always, we appreciate the opportunity to serve you!