SEATTLE (July 17, 2012) — The 2012 Western Benefits Conference was recently held at the Seattle Convention Center on July 15-18 and was jointly sponsored by the Western Pension & Benefits Conference (WP&BC) and the American Society of Pension Professionals & Actuaries (ASPPA). The conference was a huge success and provided more than 500 attendees with a plethora of information on a wide range of topics including health care and private pension reform, retirement readiness, and fixing social security. Officials from the Department of Labor and Internal Revenue Service also provided a regulatory update including the latest on 408(b)(2) disclosures. Many of the attendees, who gave glowing reviews about the knowledge and expertise that the speakers and moderators brought to the forum, were already talking about attending the 2013 Conference.
One of the most highly anticipated sessions of the conference was a discussion of EPCRS Procedure by Sherrie M. Boutwell, partner at Boutwell Fay LLP, and Avaneesh Bhagat of the Internal Revenue Service.
The session kicked off with Bhagat advising everyone that although the new EPCRS procedure has not yet been issued, it is currently in clearance. Bhagat also advised that for those concerned with the correction procedure for 403(b) plans, the plan sponsor should “fix the problem as soon as [the plan sponsor] finds it” rather than wait for the new EPCRS procedure. This was a theme that Bhagat reiterated several times throughout the session. The session continued with looking at some of the correction principles of Revenue Procedure 2008-50, starting with insignificant failures and what constitutes an insignificant failure. Bhagat indicated that if the issue of whether a failure was in fact insignificant is tenuous, then the plan sponsor can always “use VCP as an option.” Boutwell and Bhagat also looked at the correction issues concerning participant loans and specifically at when the five (5) year repayment period begins—whether it is the original date of the loan or the date that the first installment was due.
After some discussion with audience participation, Bhagat stated that for purposes of getting relief from having the loan treated as if it was a deemed distribution under section 72(p) of the Internal Revenue Code, Revenue Procedure 2008-50 requires that correction be completed within five years of the “original date of the loan.”
At the end of the session, a question came from the audience regarding the proper VCP procedure a plan sponsor should follow when failing to adopt a plan document or amendment within the time period specified in the favorable determination letter. Bhagat advised as follows:
“The compliance fee for a VCP submission that contains only a failure to adopt an amendment (upon which a favorable determination letter is conditioned) will generally be $500, if the required amendment is adopted within three months of the expiration of the remedial amendment period for adopting the amendment as provided in the plan’s most recent determination letter.”
Boutwell and Bhagat provided the perfect balance of expertise and participation, allowing session attendees to ask specific questions and get precise practical answers. On behalf of the Steering and Program Committee, we would like to thank all of the speakers, moderators, vendors, exhibitors and attendees for making this year’s Conference a smashing success. We look forward to seeing everyone at the 2013 Conference in San Diego.