A SECURE 2.0 plan amendment that was never adopted, or a SECURE 2.0 feature your payroll and recordkeeper started operating before the document authorized it, is a plan-document failure, and it belongs on the fiduciary’s desk, not in a filing cabinet. The good news is that the correction system was built for exactly this situation. The bad news is that the order in which you do things matters, and several of the decisions are yours alone.
Why a Document Gap Is a Fiduciary Problem, Not Paperwork
ERISA requires the plan to be run in accordance with its written terms. A qualified plan also has to satisfy the tax-qualification rules in the form of its document. When a law changes, the document has to be amended within the window the IRS provides, and the plan has to operate consistently with whichever version is in force. Two different failures hide inside this one topic:
- A missed or late amendment: the plan was required to be amended to reflect a legal change and the document never caught up.
- Operating before adopting: a discretionary or optional feature was put into practice (a new contribution type, a new distribution option, an eligibility change) before the plan document permitted it.
Neither is a payroll glitch. Both are questions about whether the plan did what it said it would do, which is the core of fiduciary liability.
How These Failures Usually Happen
- The document provider issued an amendment and nobody on the sponsor side signed or filed it.
- The recordkeeper turned on a new feature at the sponsor’s verbal request, with no corresponding document change.
- A restatement cycle passed while the plan was between providers, and an interim amendment fell through the gap.
- A payroll change moved a plan feature into operation while the document still described the old rules. This is closely related to the document-versus-operations mismatch we see across plans.
- An acquisition or merger brought in a plan whose document was already behind.
First Decision: Which Kind of Failure Is It?
1. Mandatory amendments that were missed
Where the law required a change, the question is whether the plan also operated in line with the law during the gap. Many plans did, and the failure is then the late paperwork alone. Confirm the amendment deadline that applied to your plan type and plan year with your document provider, because the answer depends on your plan and not on a general rule.
2. Optional features operated without authority
If a feature the law merely permits was put into practice without a document provision, the plan operated outside its terms. That is an operational failure of a different kind and may require correcting the affected participants, not just amending the document.
3. Features the document already authorized
Before assuming the worst, read the actual document. Some plans were drafted broadly enough that the feature was already covered. A careful read of the current plan document and restatement history can end the problem on the spot.
The Correction Path Under EPCRS
The IRS Employee Plans Compliance Resolution System offers a self-correction route for many failures, a voluntary filing route with the IRS for others, and an audit route that carries heavier consequences. The same logic that governs administrative error correction applies here.
1. Self-correction
Certain document failures can be corrected by adopting a retroactive amendment without contacting the IRS, subject to conditions around significance and timing that your ERISA counsel or document provider must confirm for your facts. Never assume you qualify on the basis of a headline.
2. Voluntary correction filing
Where self-correction is not available, a sponsor can submit the failure to the IRS with a proposed correction and a fee, in exchange for assurance that the failure will not be pursued in a later examination. Fees and submission mechanics change, so confirm the current requirements before budgeting.
3. Correcting the people, not just the paper
If the plan operated a feature it did not authorize, participants may have been treated in a way the document did not support. The correction has to put them where the proper terms would have. Build the affected list from the recordkeeper roster, including terminated participants with balances, and not from payroll alone.
4. Document the correction
Whatever route you take, record the failure, the decision, the corrective amendment, and the participant remedy in committee minutes and the plan file. The quality of this record is what an auditor or examiner will read first. See the guidance on recording committee decisions.
Eight-Step Self-Check
- Pull the current plan document, every amendment, and the latest restatement.
- List each recent legal change and mark whether the document addresses it.
- List each feature actually operating in payroll and at the recordkeeper.
- Compare the two lists and flag every difference.
- Classify each difference as mandatory, optional, or already covered.
- Confirm the applicable amendment window with your document provider.
- Choose the correction route with counsel and write down why.
- Identify affected participants from the roster and compute any remedy.
Settlor Decisions Versus Fiduciary Implementation
This distinction decides who has to act. Whether to adopt an optional feature at all is a settlor decision: it concerns plan design and cost, and it belongs to the employer acting as the company. Implementing a feature correctly, administering it, and correcting the plan when it goes wrong are fiduciary functions.
- Settlor, retained by the employer: adopting or declining optional features, approving a design change that increases cost, deciding to restate on a particular provider’s document.
- Fiduciary, delegable: tracking amendment deadlines, running the document-to-operations comparison, coordinating the correction filing, and building the participant remedy.
An engaged 3(16) plan administrator can carry the fiduciary side of this, but the employer still has to supply facts only it holds, such as when it actually asked the recordkeeper to turn something on and why.
Where Sponsors Get Hurt
- Treating a verbal instruction to the recordkeeper as plan design. A feature live in the system with no document backing is the classic operational failure.
- Waiting for the examiner. The correction options are friendlier before an inquiry begins, which is why a DOL investigation letter or an audit request is a bad moment to discover the gap.
- Fixing the document and forgetting the participants. A retroactive amendment does not remedy someone who was treated wrongly.
- Letting the SPD lag. Once the document changes, participant disclosure may need updating through a summary of material modifications.
- No owner. If nobody is named to watch amendment deadlines, nobody does.
Build the Control So It Does Not Recur
Fold amendment tracking into your annual routine. The year-end compliance calendar and your audit readiness checklist are natural places to add a standing item that asks, for every legal change, whether the document and the operation both reflect it. If you have been through a provider change, a merger, or a restatement, treat that as a trigger for a fresh comparison.
Who Holds the Pen When the Plan Needs Correcting
Correcting a plan-document failure requires someone with authority to decide, sign and file. Without a clearly appointed fiduciary, that authority is murky, and the decision drifts to whoever is available. Admin316 accepts formal appointment as the plan’s ERISA 402(a) named fiduciary, something most providers decline, and pairs it with 3(16) administration so the amendment tracking, the correction path and the documentation all sit with a named, accountable party. To see whether your document and your operations actually match, book a time with Admin316.
