You can self-correct many retirement plan errors without contacting the IRS or paying a fee. There are no application or reporting requirements. Self-correction, also known as the Self-Correction Program or SCP, is authorized under Revenue Procedure 2021-30, the revenue procedure that governs the Employee Plans Compliance Resolution Program (EPCRS). You can self-correct an insignificant operational error at any time to preserve the tax-favored status of your plan. An operational error occurs when you don’t follow the written terms of the plan. Even where the operational error is significant, you may still be able to self-correct if action is taken in a timely manner. Availability and timing of retirement plan self-correction Retirement plan self-correction options Type of failure Type of plan Self-correction available? When must self-correction be completed? Insignificant operational Any Yes At any time Significant operational 401(k), profit-sharing or other qualified plan 403(b) plan Yes before the end of the third plan year after the failure occurred, or substantially corrected within a reasonable time Related to plans acquired in corporate mergers SIMPLE IRA plan SEP plan No N/A – Use VCP ADP or ACP test violations Special rule Yes substantially corrected before the end of the plan year beginning after the business transaction allowed even if failure occurred more than two plan years earlier Special rule Yes substantially corrected before the end of the third plan year following the plan year that includes the last day of the additional period for correction permitted under IRC Sections 401(k) (8) or 401(m)(6) Any No N/A – Use VCP More on self-correcting plan errors: Retirement plan errors eligible for self-correction Steps to self-correct plan errors Timing of retirement plan self-correction Special rules for self-correction of retirement plan errors FAQs regarding the self-correction program Related Learn more about how to correct plan errors
