VCP Fees. A new user fee applies for submissions to the IRS under the Voluntary Correction Program of the Employee Plans Compliance Resolution System (VCP) on or after January 2, 2018 to correct qualified retirement plan failures. Before 2018, the VCP user fee was based on the number of plan participants (with a maximum fee of $15,000) and reductions were available for submissions to correct certain plan failures related to plan loans, required minimum distributions or late adoption of interim amendments.

The new VCP user fee is based on plan assets: $1,500 for plans with assets of $500,000 or less; $3,000 for plans with assets of between $500,000 and $10 million; and $3,500 for plans with assets of more than $10 million. There are no reductions available.

Going forward, plan sponsors should consider whether non-amender corrections or those involving plan loans or required minimum distributions (previously cheap to submit alone), should be combined with other corrections.

Form 8950. The IRS has revised Form 8950, Application for Voluntary Correction Program Submission under the Employee Plans Compliance Resolution System, which must be used to make VCP submissions to the IRS. The new form generally deletes questions and information items about determination letter submissions (no longer relevant now that the IRS will generally only issue determination letters to new or terminating individually designed qualified retirement plans).