What is EPCRS?

EPCRS stands for the “Employee Plans Compliance Resolution System,” which is a comprehensive system of correction programs for sponsors of retirement plans that are intended to satisfy but have failed to satisfy the requirements of § 401(a), 403(a), 403(b), 408(k), or 408(p) of the Internal Revenue Code (the "Code"). This system is described in a Revenue Procedure that is published and regularly updated by the Internal Revenue Service. See: Revenue Procedure 2016-51. Under EPCRS, employers that sponsor qualified retirement plans (“Plan Sponsors”) may correct these failures in order to protect the tax-favored retirement benefits offered to their employees. Correction generally means putting participants back in the place they would have been in had the mistake not occurred.


EPCRS is composed of three different programs: the Self-Correction Program ("SCP"), the Voluntary Correction Program ("VCP"), and the Audit Closing Agreement Program ("Audit CAP").

  • SCP (self-correction). Plan Sponsors that have established compliance practices and procedures may, at any time without paying any fee or sanction (even during an IRS examination), correct insignificant operational mistakes. Qualified plans (such as 401(k) plans) and 403(b) plans may generally self-correct significant operational failures without payment of any fee or sanction if the correction is made within certain deadlines.

  • VCP (voluntary correction with IRS approval). Even if a plan is not eligible for self-correction, most plans may still be corrected at any time before audit, by paying a fee and filing the required forms with the IRS. Once approved, the IRS will issue a “compliance statement” confirming that the method of correction is adequate and that the IRS will not take enforcement action with respect to failures disclosed in the application. Under VCP, there are special procedures for Anonymous Submissions and Group Submissions.

  • Audit CAP (correction on audit). If a failure (other than an eligible failure corrected through SCP or VCP) is identified on audit, the Plan Sponsor may correct the failure and pay a sanction. Under the general principals of EPCRS, the sanction is intended to bear a reasonable relationship to the nature, extent, and severity of the failure, considering the extent to which correction occurred before audit.

Our firm works regularly on issues involving correcting mistakes in all types of employee benefits plans, both within and outside of EPCRS. See Help! I Found a Mistake in my Employee Benefit Plan!



© Boutwell Fay LLP 2018, All Rights Reserved.This handout is for information purposes only, and may constitute attorney advertising. It should not be construed as legal advice and does not create an attorney-client relationship. If you have questions or would like our advice with respect to any of this information, please contact us.The information contained in this article is effective as of July 31, 2018.



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