Common use of Section 1101 of the Pension Protection Act of 2006 Clause in Contracts

Section 1101 of the Pension Protection Act of 2006. (a) Section 1101 of the Pension Protection Act of 2006 (PPA ‘06), Public Law 109-280 (120 Stat. 780), grants the Secretary of the Treasury the full authority to establish and implement EPCRS and, among other things, instructs the Secretary to continue to update and improve EPCRS, giving special attention to the following: (1) increasing the awareness and knowledge of small employers concerning the availability and use of the program; (2) taking into account special concerns and circumstances that small employers face with respect to compliance and correction of compliance failures; (3) extending the duration of the self- correction period under SCP for significant compliance failures; (4) expanding the availability to correct insignificant compliance failures under SCP during audit; and (5) assuring that any tax, penalty, or sanction that is imposed by reason of a compliance failure is not excessive and bears a reasonable relationship to the nature, extent, and severity of the failure. (b) EPCRS has historically been structured to achieve the general principles that are described in section 1.02 of this revenue procedure. This revenue procedure, like the many predecessor revenue procedures1 that addressed correction of qualification failures, continues to include modifications that are designed to make the EPCRS programs more accessible, particularly with respect to small employers. For example, Appendix F has been substantially expanded to add additional failures that commonly occur in plans maintained by small employers, and significantly reduces the burden and cost to an employer of submitting under the VCP. Various other changes have been made that will provide assurance to small employers and other Plan Sponsors, including expansion of the standard corrections in Appendices A and B (such as correction for abandoned plans and orphan contracts and further expansion of standard correction for qualification failures involving the operational failure to extend elective deferrals to eligible employees). In addition, eligibility under SCP has been expanded with respect to employers who discover failures in their plans and have begun the correction process. See section 2.01 for a more thorough list of changes made in this revenue procedure.