A retirement-account mistake can create problems for both a business and its employees. The consequences depend on what went wrong, which rules apply, and how the error is corrected.
On October 22, the Treasury Department and IRS announced two procedures addressing retirement-plan and IRA errors. The employer-plan update is already effective. The new IRA correction program takes effect May 1, 2027.
For businesses, workers, and account owners, understanding that distinction is the starting point.
What changes for employers?
Revenue Procedure 2026-34 updates the Employee Plans Compliance Resolution System (EPCRS). This is the framework employers use to correct qualifying retirement-plan failures while preserving favorable tax treatment.
The update incorporates provisions of the SECURE 2.0 Act and earlier IRS guidance. Changes include expanded opportunities to self-correct certain eligible inadvertent failures, including some plan-loan errors and failures involving SEP and SIMPLE IRA arrangements. Eligibility conditions still apply.
EPCRS continues to provide three routes:
Self-Correction Program: Eligible failures can be corrected without an IRS submission or program fee.
Voluntary Correction Program: A plan sponsor submits a proposed correction to the IRS for approval and pays an applicable fee.
Audit Closing Agreement Program: Certain failures identified during an examination can be resolved through correction and an agreed sanction.
The available route depends on the failure, the plan’s circumstances, and the procedure's requirements.
Why businesses should pay attention
The practical question for an employer is whether its procedures can identify an error and support a proper correction.
For example, a business reviewing a possible contribution or enrollment mistake should gather the plan documents, payroll records, employee elections, and relevant dates. Those records can help its administrator determine what happened and which correction method applies.
Employers should ask their retirement-plan administrator:
Does the updated procedure affect any unresolved errors?
Is self-correction available in our circumstances?
What payments, notices, or documentation would the correction require?
What operational change would prevent the same problem from recurring?
These are practical review questions, rather than a conclusion that any particular error qualifies for relief. The procedure emphasizes proper administrative practices, timely correction, and documentation.
A separate program for IRA errors
Revenue Procedure 2026-33 establishes the IRA Compliance Resolution System, or ICRS.
The IRS says the program will allow IRA custodians and account owners to request correction of certain eligible inadvertent failures caused by service-provider errors. It takes effect on May 1, 2027.
That scope matters. Account owners should have their situation reviewed before assuming the new program provides a remedy.
What about missed rollover deadlines?
The announcement also addresses requests to waive the 60-day rollover requirement.
The IRS plans to transition the relevant waiver requests from the private-letter-ruling process into ICRS during 2027 and 2028. Existing automatic-waiver and self-certification procedures remain available for taxpayers who meet their requirements.
Anyone facing a rollover issue now should review those existing options rather than wait for the new program to begin.
What readers should do now
For employers, this is a useful time to ask the plan administrator whether the updated procedure changes how outstanding errors should be handled.
For IRA owners, retain account statements, transfer instructions, correspondence, and transaction dates when a possible service-provider error occurs. Ask the custodian for a written explanation of the issue and the available correction process.
The announcement provides additional procedures for addressing qualifying mistakes. The outcome for a specific business or account owner will depend on the facts, eligibility requirements, and applicable effective date.
Sources: IRS announcement, October 22, 2026; Revenue Procedure 2026-34; Revenue Procedure 2026-33.