Retirement plan sponsors are tasked with complex fiduciary and administrative responsibilities, with pitfalls around every corner. When compliance tasks fall through the cracks, the IRS, through the Voluntary Correction Program (VCP), provides a way for plan sponsors to correct mistakes and preserve their plans’ tax-favored status.

Let’s take a look at the Top 10 Failures discovered via the VCP, along with tips to help you avoid these mistakes and tighten up your company’s compliance practices in 2017.

1. Failure to amend the plan based on tax law changes by the end of the period required by the law.
Legislative changes sometimes require a plan document amendment; check with your TPA or service provider to ensure your plan document reflects recent changes in the law.

2. Failure to follow the plan’s definition of compensation for determining contributions.
The integrity of nondiscrimination tests relies on accurate compensation reporting. Be sure your testing census corresponds to your plan document’s definition of compensation and that it incorporates any excluded elements of compensation, such as bonuses and overtime.