Correction by Amendment Under VCP and SCP Sample Clauses

The "Correction by Amendment Under VCP and SCP" clause outlines procedures for correcting errors in retirement or benefit plans through the IRS's Voluntary Correction Program (VCP) and Self-Correction Program (SCP). Under this clause, plan sponsors can identify and fix compliance issues either by submitting corrections to the IRS for approval (VCP) or by making certain corrections internally without IRS involvement (SCP), depending on the nature and severity of the error. This clause is essential for maintaining a plan's tax-qualified status and helps organizations proactively address and resolve compliance problems before they result in penalties or disqualification.
Correction by Amendment Under VCP and SCP. (1) □ 401(a)(17) Failures. (a) Contribution Correction Method. In addition to the reduction of account balance correction method under section 2.06 of this Appendix B, an employer may correct a □ 401(a)(17) failure for a plan year under a defined contribution plan under VCP and SCP (in accordance with the requirements of sections 8, 10 and 11) by using the contribution correction method set forth in this paragraph. The employer contributes an additional amount on behalf of each of the other employees (excluding each employee for whom there was a □ 401(a)(17) failure) who received an allocation for the year of the failure, amending the plan (as necessary) to provide for the additional allocation. The amount contributed for an employee is equal to the employee's plan compensation for the year of the failure multiplied by a fraction, the numerator of which is the improperly allocated amount made on behalf of the employee with the largest improperly allocated amount, and the denominator of which is the limit under □ 401(a)(17) applicable to the year of the failure. The resulting additional amount for each of the other employees is adjusted for earnings. (See Example 20.) (b) Examples. The facts are the same as in Example 19. Employer J corrects the failure under VCP using the contribution correction method by (1) amending the plan to increase the contribution percentage for all eligible employees (other than Employee W) for the 1998 plan year and (2) contributing an additional amount (adjusted for earnings) for those employees for that plan year. To determine the increase in the plan's contribution percentage (and the additional amount contributed on behalf of each eligible employee), the improperly allocated amount ($4,800) is divided by the □ 401(a)(17) limit for 1998 ($160,000). Accordingly, the plan is amended to increase the contribution percentage by 3 percentage points ($4,800/$160,000) from 8% to 11%. In addition, each eligible employee for the 1998 plan year (other than Employee W) receives an additional contribution of 3% multiplied by that employee's plan compensation for 1998. This additional contribution is adjusted for earnings.
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Correction by Amendment Under VCP and SCP. EARNINGS ADJUSTMENT METHODS AND EXAMPLES .01 Earnings Adjustment Methods p.
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Correction by Amendment Under VCP and SCP. (1) 401(a)(17) Failures.
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Related to Correction by Amendment Under VCP and SCP

  • Termination by Agreement both parties may agree to terminate this Agreement;

  • MODIFICATION BY SUBSEQUENT AGREEMENT This Agreement may be modified by subsequent agreement of the Couple only by an instrument in writing signed by both of them, an oral agreement to the extent that the Couple executes it, or an in-court oral agreement made into an order by a court of competent jurisdiction.

  • SUSPENSION BY STATE FOR CONVEVIENCE 14.4.1 The State may, without cause, order the Contractor in writing to suspend, delay or interrupt the Work in whole or in part for such period of time as the State may determine. 14.4.2 The Contract Sum and Contract Time shall be adjusted for increases in the cost and time caused by suspension, delay or interruption as described in section 14.4.

  • Amendment, Modification and Waiver This Agreement may not be amended, modified or waived except by an instrument or instruments in writing signed and delivered on behalf of each of the parties hereto.

  • TERMINATION BY STATE FOR CONVENIENCE 14.3.1 The State may, at any time, terminate this agreement for the State’s convenience and without cause. 14.3.2 Upon receipt of written notice from the State of such termination for the State’s convenience, the Contractor shall: (a) cease operations as directed by the State in the notice; (b) take actions necessary, or that the State may direct, for the protection and preservation of the Work; and (c) except for Work directed to be performed prior to the effective date of termination stated in the notice, terminate all existing subcontracts and purchase orders and enter into no further subcontracts and purchase orders. 14.3.3 In case of such termination for the State’s convenience, the Contractor shall be entitled to receive payment for Work executed, and costs incurred by reason of such termination, along with reasonable overhead and profit on the Work not executed.