Don’t ask for trouble with plan provisions

One of my biggest tasks as an ERISA attorney is helping plan sponsors out with voluntary compliance and self-correction programs. Many of these problems that have to be fixed are as a result of the plan document saying one thing and the plan sponsor doing another. This might be because the third party administrator (made an error) or the plan document didn’t contain the provision that the plan sponsor thought it did.


Regardless of who caused the error, it’s my opinion that plan sponsors often ask for trouble by creating out of the box, unique plan provisions that lead to multiple errors. It usually deals with a provision regarding compensation and the plan sponsor’s desire to exclude or include certain parts of compensation. These mistakes may require corrective contributions or an IRS approval of a corrective plan amendment.


It’s not to say you shouldn’t have unique plan provisions especially when you need them, it’s just a word of advice that avoid them if you can. If you do need them, make sure the plan document is consistent with your intent and that the TPA understands the unique plan provision.

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