Correction Policies Changing for Some Defined Contribution Plans
VRS is in the process of updating its policies for handling employer corrections to the following plans:
- Commonwealth of Virginia 457 Deferred Compensation Plan
- Virginia Cash Match Plan 401 (a)
- Optional Retirement Plans
The updated correction policies will be available soon in the Defined Contribution Plans Resource Center for Employers.
These updates were made in accordance with Internal Revenue Service guidelines under the Employee Plans Compliance Resolution System (EPCRS), while also following VRS plan governance documents.
Accurate employer reporting of contributions to defined contribution plans is essential to ensuring member contributions are invested timely and according to IRS requirements.
As a best practice, take time to reconcile payroll each month to ensure you are withholding the correct amount from each member's paycheck.
Should you discover a mistake, the correction policies address how to remedy the following errors:
- Missing contributions to members’ defined contributions accounts.
- Delayed submission of contributions.
- Missed earnings on the late contributions.
- Contributions remitted in error to members’ accounts.
- Look for more details about the changes in future issues of Employer Update.