Resource demands on plan sponsors who must complete a lengthy online survey as part of the IRS's 401(k) Compliance Check Questionnaire Project are among the concerns expressed by the SPARK Institute (www.sparkinstitute.org) in a recent letter to the IRS.
The Institute also pointed to the limited amount of time that plan sponsors have to complete the survey and compliance implications related to the questionnaire and the possible consequences of their responses.
“We are concerned that it will take many plan sponsors a significant amount of time to gather and review the necessary data, and complete the questionnaire,” said Larry H. Goldbrum, general counsel for the Institute. “Many plans will be required to work with multiple service providers in order to gather and consolidate the required information and, because of the potential legal implications and consequences that may result from the questionnaire, many employers may find it necessary to have their completed forms reviewed by legal counsel prior to submitting them.”
The Institute asked the IRS to give plan sponsors twice as much time (180 days instead of 90) to respond to the questionnaire or to offer a 90-day extension to plan sponsors who request it. In addition, the Institute developed a “Compliance Alert” outlining its concerns (visit www.sparkinstitute.org/comments-and-materials.php and scroll down to SPARK Institute Compliance Alert Re: IRS 401(k) Compliance Check).