IRS Updates EPCU Project on Non-Governmental 457(b) Plans
The IRS Employee Plans Compliance Unit (EPCU) has updated the information concerning its project on non-governmental 457(b) plans.
The EPCU is soliciting information about the characteristics and features of their plans, including contributions and employer and employee eligibility. Through the project, the EPCU seeks to do the following:
- learn more about the operation of non-governmental 457(b) plans;
- verify that the plans comply with the Internal Revenue Code requirements;
- identify issues of noncompliance; and
- recommend ways to remove any barriers to compliance.
Among the issues that the IRS is focusing on in this effort are:
- verifying that participation in the plan is limited to a select group of highly compensated employees, managers, directors or officers;
- determining whether the plan contains features not permitted in a top hat plan, such as loans, age 50 catch-up provisions or contributions placed in a trust for the exclusive benefit of participants; and
- determining whether unforeseeable emergency distributions have been made.
The IRS will provide notification when a plan isn't established or operated in accordance with Code Section 457(b), and provide information about what actions are needed, which may include an audit of the plan or correction under the Voluntary Correction Program. The IRS will accept submissions relating to Section 457(b) on a provisional basis outside of the Employee Plans Compliance Resolution System (EPCRS) through standards that are similar to EPCRS, and it will accept corrections based on a facts and circumstances.