November 08, 2026

Fixing Retirement Plan Errors Without the IRS: The Expanded Self-Correction Program

Retirement plan mistakes are common. A new hire is enrolled late, a deferral is missed, or a participant loan is set up wrong. Until now, many of those errors required a formal filing with the IRS and a user fee to fix. On October 22, 2026, the IRS issued Revenue Procedure 2026-34, which significantly expands the ability of employers to correct plan errors on their own. The new rules took effect immediately. They offer real relief, but only to employers that can show they had sound compliance practices in place before the error occurred.

Three Ways to Fix a Plan Error

The IRS correction program, known as the Employee Plans Compliance Resolution System (EPCRS), has three parts. The Self-Correction Program lets an employer fix an error without IRS approval, filing, or fee. The Voluntary Correction Program requires a filing and fee but produces an IRS compliance statement. The Audit Closing Agreement Program applies when the IRS finds the error on examination, usually at a higher cost. The program covers 401(k) and other qualified plans, 403(b) plans, SEPs, and SIMPLE IRA plans. The new procedure replaces the prior version, Revenue Procedure 2021-30, and implements changes Congress directed in the SECURE 2.0 Act.

What Employers Can Now Fix on Their Own

Self-correction was previously narrow. Significant errors and plan document errors generally required a favorable IRS determination letter, and some categories could not be self-corrected at all. The new procedure removes the determination-letter prerequisite and opens self-correction to a broader category the IRS calls “eligible inadvertent failures.” That category now reaches certain:

• plan document failures;
• demographic failures, such as coverage or participation problems;
• employer eligibility failures, such as a sponsor adopting a plan type it was not eligible to maintain; and
• participant loan failures, some of which could previously be fixed only through a filing.

Egregious failures, misuse of plan assets, and abusive tax avoidance arrangements remain ineligible.

More Time, and Less Clawback

The procedure gives employers a clearer and longer correction window. A self-correction is timely if completed by the later of the last day of the third plan year after the year of the failure or 18 months after the failure is identified. For employer eligibility failures, contributions generally must stop within six months after the problem is identified.

The rules on overpayments also soften. When a plan pays a participant too much by mistake, the plan generally no longer has to chase repayment. Exceptions apply to overpayments tied to certain Internal Revenue Code compensation and contribution limits, subject to a small de minimis threshold.

Finally, a correction method for missed deferrals under automatic enrollment features, previously temporary, is now permanent. It also extends to terminated employees, SEPs, and SIMPLE IRA plans. The method has specific timing and notice requirements, so payroll and recordkeeping teams should review them closely.

The Catch: Your Procedures Must Exist Before the Error

Self-correction is available only if the error occurred despite established practices and procedures that were reasonably designed to promote compliance and routinely followed. A general intention to comply is not enough. Timing also matters. Once the IRS opens an examination, self-correction generally narrows to insignificant operational failures, or to cases where the employer had already shown a specific commitment to correct.

A Practical Decision, Not a Default One

Self-correction is faster and cheaper, but it comes with no IRS sign-off. For larger or more complex errors, a Voluntary Correction Program filing may still be worth the fee for the certainty it provides. The IRS also issued a companion procedure, Revenue Procedure 2026-33, creating a separate correction program for IRAs that takes effect May 1, 2027. Treasury and the IRS have requested public comments on both procedures. 

Key Takeaways

Revenue Procedure 2026-34 lets employers fix more retirement plan errors without an IRS filing or fee, and gives them more time to do it. The benefit depends on written compliance procedures that existed and were followed before the error. Employers should document their procedures now, revisit any known or pending errors under the new rules, and ask their recordkeepers and payroll providers how they are applying the changes. Our attorneys can help employers evaluate whether a particular error qualifies for self-correction.