An insignificant operational failure can be self-corrected at any time. A significant operational failure eligible for self-correction must generally be completed: before the end of the second plan year after the failure occurred, or substantially corrected within a reasonable time. Substantially corrected within a reasonable time A failure is deemed substantially corrected within a reasonable time if one of these two tests is met: The plan sponsor takes prompt action within the correction period (the two plan years after the year in which the failure occurred) to: identify the operational failure, formulate a correction method, and begin to make the corrections. Correction must be completed within 120 days after the last day of the correction period. or The plan sponsor: completes correction for at least 65 percent of participants affected by the mistake within the correction period (the two plan years after the year in which the failure occurred), and completed correction for the remaining affected participants in a diligent manner. Self-correction isn’t available for significant operational failures that are not timely corrected. However, the sponsor can still correct these failures with IRS approval by using the Voluntary Correction Program. More on self-correcting plan errors Self-correction of retirement plan errors Retirement plan errors eligible for self-correction Steps to self-correct retirement plan errors Special rules for self-correction of retirement plan errors FAQs regarding the self-correction program Related Learn more about how to correct plan errors
