14568-D Appendix C Part II Schedule 4 Simple IRAs

Department of the Treasury - Internal Revenue Service

Form 14568-D
(January 2014)

OMB Number
1545-1673

Appendix C Part II Schedule 4
Simple IRAs

Please include the plan name, Applicant’s EIN, and plan number information on each page of the submission, including attachments
Plan name

EIN

Plan number

Section I - Identification of Failure(s) and Proposed Method(s) of Correction
The following failure(s) occurred with respect to the SIMPLE IRA Plan identified above: (Check failure(s) that apply. Within each failure,
check applicable boxes, and provide the information requested.)
A. Employer Eligibility Failure
The plan was adopted by a Plan Sponsor who was (or subsequently became) ineligible to sponsor a SIMPLE IRA Plan under
the requirements of § 408(p) because the Plan Sponsor (and, if applicable, its related controlled group or affiliated service
group employers) had more than 100 employees (including leased employees, if applicable) who earned $5,000 or more in
compensation during the following plan year(s):
The plan was adopted by a Plan Sponsor who was not eligible to sponsor a SIMPLE IRA Plan under the requirements of
§ 408(p) because the Plan Sponsor established or maintained a Qualified Plan with respect to which contributions were made
(or under which benefits were accrued) during any plan year of the SIMPLE IRA Plan. The failure occurred during the following
plan year(s):
Description of the Proposed Method of Correction:
All contributions to the plan ceased as of
(insert a date no later than the date this VCP
submission is filed with the Service). The Plan Sponsor will not permit any new employer or salary reduction contributions to
be made to the plan.
B. Failure to Make Required Employer Contributions
The Plan Sponsor failed to make employer contributions on behalf of eligible employees as required under the terms of the plan.
The failure occurred on account of the erroneous exclusion of eligible employees
Other (describe):

The failure occurred for the following plan years:
For the applicable plan years, the provisions of the plan document required the Plan Sponsor to make employer contributions
based on the following formula:
2% nonelective contribution on behalf of each eligible employee who earned at least $5,000 in compensation for the year.
Matching contribution on behalf of each eligible employee equal to deferrals up to 3% of compensation.
Grace period applied. The plan provided for a matching contribution on behalf of each eligible employee equal to deferrals up
to
% of compensation.
(Note: If the failure occurred for multiple plan years and different employer contribution criteria applied during those years, check
the applicable box, and indicate the plan years for which the formula applied.)
Description of the Proposed Method of Correction:
The Plan Sponsor has contributed (or will contribute) additional amounts to the plan on behalf of each affected employee. For each
affected employee, the corrective contribution will be determined by calculating the contribution the employee would have been
entitled to receive under the terms of the plan and subtracting any contributions already made on behalf of the employee for the
plan year. The corrective contribution made on behalf of an affected employee will be adjusted for Earnings. Earnings will be
calculated from the last day of the plan year for which the failure occurred through the date of the corrective contribution. The
corrective contribution (adjusted for Earnings) will be made to each affected employee’s SIMPLE IRA account. If an affected
employee does not have a SIMPLE IRA account, an account will be established for that employee.

Catalog Number 66148F
www.irs.gov
For Paperwork Reduction Act information see Revenue Procedure 2013-12.

Form 14568-D (1-2014)

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Plan name

EIN

Plan number

If the plan did not provide eligible employees with the opportunity to make elective deferrals and the plan provides for matching
contributions, the corrective matching contribution will be based on the assumption that the eligible employee would have made an
elective deferral equal to 3% of compensation.
The total corrective contribution (before adjusting for Earnings) for each plan year is:
Year

Corrective Contribution

The Earnings calculation for an affected employee will be based on one of the following method(s) (check one):
Actual investment results of the affected employee’s SIMPLE IRA account.
The interest rate incorporated in the Department of Labor’s Voluntary Fiduciary Correction Program Online Calculator (“VFCP
Online Calculator”) (http://www.dol.gov/ebsa/calculator/main.html), since the actual Earnings of the affected employee’s IRA
account cannot be ascertained.
Actual investment results for years in which data for the affected employee is available, and the rate incorporated in the VFCP
Online Calculator for years in which the actual investment results of the affected employee’s IRA account cannot be
ascertained. The VFCP Online Calculator was or will be used for the following year(s):
Former employees affected by the failure (check one):
There are no former employees affected by the failure.
Affected former employees (or if deceased, their estate or known beneficiary) will be contacted, and corrective contributions
will be made to their SIMPLE IRA accounts. To the extent that an affected former employee or beneficiary cannot be located
following a mailing to the last known address, the Plan Sponsor will take the actions specified below to locate that employee or
beneficiary:

After such actions are taken, if an affected employee or beneficiary is not found but is subsequently located on a later date, the
Plan Sponsor will make corrective contributions to the affected SIMPLE IRA account at that time.
C. Failure to Provide Eligible Employees with the Opportunity to Make Elective Deferrals.
The Plan Sponsor did not provide employee(s) who satisfied the applicable eligibility requirements with the opportunity to make
elective deferrals to the SIMPLE IRA plan. The failure occurred for the following plan year(s):
Description of the Proposed Method of Correction
The Plan Sponsor has contributed (or will contribute) additional amounts to the plan on behalf of each affected employee. The
corrective contribution will be made to compensate the affected employee(s) for the missed deferral opportunity. The corrective
contribution on behalf of each affected employee is equal to 50% of what the employee’s deferral might have been had he or she
been provided with the opportunity to make elective deferrals to the plan. Since the employee’s deferral decision is not known, the
deferral amount is estimated by assuming that the excluded employee would have made an elective deferral equal to 3% of his or
her compensation. (Example: N, a nonhighly compensated employee was erroneously excluded from the plan. During the year of
exclusion, N made $10,000 in compensation. N’s missed deferral is estimated to be: 3% times $10,000 or $300. The required
corrective contribution on behalf of N, before adjusting for Earnings, is 50% of $300 or $150). Thus, the required corrective
contribution for an employee who was erroneously excluded from making elective deferrals from a SIMPLE IRA Plan is equal to
1.5% of compensation (adjusted for Earnings).
Catalog Number 66148F

www.irs.gov

Form 14568-D (1-2014)

Page 3
Plan name

EIN

Plan number

The total corrective contribution (before adjusting for Earnings) on behalf of the affected employees for each plan year is as follows:
Year

Corrective Contribution

The corrective contribution made on behalf of each affected employee will also be adjusted for Earnings. Earnings will be
calculated from the date(s) that the contribution(s) should have been made through the date of the corrective contribution. The
corrective contribution (adjusted for Earnings) will be made to each affected employee’s SIMPLE IRA account. If an affected
employee does not have a SIMPLE IRA account, a SIMPLE IRA account will be established for that employee. Earnings will be
calculated on the basis of one of the following methods (check one):
Actual investment results of the affected employee’s SIMPLE IRA account.
The interest rate incorporated in the VFCP Online Calculator, since the actual Earnings of the affected employee’s IRA
account cannot be ascertained.
Actual investment results for years in which data for the affected employee is available, and the rate incorporated in the VFCP
Online Calculator for years in which the actual investment results of the affected employee’s IRA account cannot be
ascertained. The VFCP Online Calculator was or will be used for the following year(s):
Former employees affected by the failure (check one):
There are no former employees affected by the failure.
Affected former employees (or if deceased, their estate or known beneficiary) will be contacted, and corrective contributions
will be made to their SIMPLE IRA accounts. To the extent that an affected former employee or beneficiary cannot be located
following a mailing to the last known address, the Plan Sponsor will take the actions specified below to locate that employee or
beneficiary:

After such actions are taken, if an affected employee or beneficiary is not found but is subsequently located on a later date, the
Plan Sponsor will make corrective contributions to the affected SIMPLE IRA account at that time.
D. Excess Amounts Contributed
The Plan Sponsor contributed Excess Amounts to the plan on behalf of participants as Follows (check boxes that apply):
Amounts were contributed in excess of the benefit the participants were entitled to under the plan.
Elective deferrals were made to the SIMPLE IRA in excess of the limitation under the terms of the SIMPLE IRA (e.g., the
applicable limit under § 408(p)(2)(E)).
The total of the Excess Amounts for each affected plan year was as follows:
Year

Catalog Number 66148F

Excess Amounts

Number of Participants Affected

www.irs.gov

Form 14568-D (1-2014)

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Plan name

EIN

Plan number

Description of the Proposed Method of Correction (check all correction methods that apply):
Distribution of Excess Elective Deferrals
The Plan Sponsor has effected (or will effect) a distribution of the Excess Amounts, adjusted for Earnings through the date of
correction, to the affected participant(s). The Earnings adjustment will be based on the actual rates of return of the participant’s
SIMPLE IRA account from the date(s) that the excess deferrals were made through the date of correction.
Affected participants were (or will be) informed that the distribution of an Excess Amount is not eligible for favorable tax
treatment accorded to distributions from a SIMPLE IRA and, specifically, is not eligible for tax-free rollover.
The total corrective distribution (before adjusting for Earnings) for each affected plan year is as follows:
Year

Corrective Distribution

Number of Participants Affected

Distribution of Excess Employer Contributions
The Plan Sponsor has effected (or will effect) the return of excess employer contributions, adjusted for Earnings through the
date of correction, to the Plan Sponsor. The Earnings adjustment will be based on the actual rates of return on the affected
participants’ SIMPLE IRA accounts from the date(s) that the excess employer contributions were made through the date of
correction. The amount returned to the Plan Sponsor is not includible in the gross income of the affected participant(s). The
Plan Sponsor is not entitled to a deduction for such excess employer contributions. The amount returned is reported on Form
1099-R as a distribution issued to the affected participant(s), indicating the taxable amount as zero.
The return of the excess employer contributions (before adjusting for Earnings) for each affected plan year is as follows:
Year

Return of Excess Employer Contributions

Number of Participants Affected

Retention of Excess Amounts
Note: If this correction method is selected, an additional VCP fee is required. (See section 12.06(2) of Rev. Proc. 2013-12.)
The Excess Amounts (including Earnings) were retained in the SIMPLE IRA accounts of the affected participants as follows:
Year

Catalog Number 66148F

Excess Amounts Retained

www.irs.gov

Number of Participants Affected

Form 14568-D (1-2014)

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Plan name

EIN

Plan number

The Earnings adjustment will be based on the actual rates of return of the SIMPLE IRA from the date(s) that the excess employer
contributions were made through the date of correction.
Excess Amounts of $100 or less (See section 6.02(5)(e) of Rev. Proc. 2013-12.)
For one or more participants, the total Excess Amount (employer contributions and/or elective deferrals before adjusting for
Earnings) is $100 or less. The Excess Amount will not be distributed.
Former employees affected by the Excess Amounts failure (check one):
There are no former employees affected by the failure.
Affected former employees (or if deceased, their estate or known beneficiary) will be contacted, and corrective contributions
will be made to their SIMPLE IRA accounts. To the extent that an affected former employee or beneficiary cannot be located
following a mailing to the last known address, the Plan Sponsor will take the actions specified below to locate that employee or
beneficiary:

After such actions are taken, if an affected employee or beneficiary is not found but is subsequently located on a later date, the
Plan Sponsor will make corrective contributions to the affected SIMPLE IRA account at that time.

Section II - Change in Administrative Procedures
Please include an explanation of how and why the failures arose and a description of the measures that will be implemented to ensure
that the same failures will not recur.

Section III - Request For Excise Tax Relief (check if applicable)
Excise tax pursuant to § 4972. The Plan Sponsor requests that the Service not pursue the excise tax under § 4972. (This
applies to situations where corrective contributions made in accordance with this submission would be nondeductible
contributions for the year of correction and subject to the excise tax under § 4972. See section 6.09(3) of Rev. Proc. 2013-12.
Please enclose a written explanation in support of your request for relief from this excise tax.)

Section IV - Enclosures
In addition to the applicable items listed on the Procedural Requirements Checklist for Form 8950, the Plan Sponsor encloses the
following with this submission:
● The applicable plan document. (This could be an IRS form document, such as a 5305 SIMPLE or 5304 SIMPLE, or a prototype
document developed by a financial institution. If a prototype plan document is used, please send a copy of the most recent
opinion letter issued with respect to such plan document.)
● A written explanation of how and why the failure(s) described in this submission occurred, including a description of the
administrative procedures applicable to the failure(s) in effect at the time the failure(s) occurred.
● For failures that involve corrective contributions or corrective distributions, a description of assumptions and supporting
calculations used to determine the amount needed for correction:
Catalog Number 66148F

www.irs.gov

Form 14568-D (1-2014)

Page 6
Plan name

EIN

Plan number

1) For failures to make required employer contributions and for failures to provide eligible employees with the opportunity to make
elective deferrals:
a) Computations in support of the corrective contribution amounts attributable to each participant. In the case of a failure to
provide eligible employees with the opportunity to make elective deferrals, please include computations showing how the
average deferral percentage, missed deferral, and corrective contribution amount were determined.
b) Calculations showing how the Earnings adjustment and the ultimate corrective contribution on behalf of affected employees
will be determined. (Please use estimates, including an estimated correction date, if corrective contributions have not been
made yet.)
2) For failures involving the contribution of Excess Amounts:
a) Computations in support of the excess contribution amounts attributable to each participant.
b) Calculations showing how the Earnings adjustment and the ultimate corrective distribution amounts are determined. (Please
use estimates, including an estimated correction date, if corrective distributions have not been made yet.)
● Explanations in support of requests for excise tax relief.
● Any other information that would be useful for the purpose of understanding the proposals made under the submission.

Catalog Number 66148F

www.irs.gov

Form 14568-D (1-2014)