CASE OF THE WEEK – Governmental 457(b) Plans and Corrections

By Jenny Kiffmeyer, J.D – The Retirement Learning Center

Governmental 457(b) Plans and Corrections

ERISA consultants at the Retirement Learning Center (RLC) Resource Desk regularly receive calls from financial advisors on a broad array of technical topics related to IRAs, qualified retirement plans and other types of retirement savings and income plans, including nonqualified plans, stock options, and Social Security and Medicare.  We bring Case of the Week to you to highlight the most relevant topics affecting your business.

A recent call with a financial advisor from Pennsylvania is representative of a common inquiry related to correcting governmental 457(b) plan errors. The advisor asked: “Are there any guidelines for correcting governmental 457(b) plan errors?” 

Highlights of Discussion

Yes, there are.  The IRS gives a great deal of leeway to governmental 457 plans to self-correct many errors following the guidelines in its Employee Plans Compliance Resolution System (EPCRS) contained in Revenue Procedure 2021-30.

For a general summary, please see the IRS’s website guidance 457(b) Plan Submissions to Voluntary Compliance.  Note the section on “Governmental plan sponsors can self-correct.”  There is no IRS filing or fee associated with self correction, but the sponsoring entity should maintain adequate records to demonstrate it properly corrected the error in the event of a plan audit.

Here are the basics steps to self correction:

  1. Make any necessary corrections to put the participants in the position they would have been in if the error had not occurred.
  2. Document the steps you took to correct the error.
  3. Adjust your administrative procedures, if necessary, to make sure the mistake does not happen again.

Any reasonable and appropriate self-correction method described in Section 6 of EPCRS may be used.


The IRS has included correction principles in its EPCRS for 457(b) plan sponsors.  Governmental 457(b) plan sponsors have the added ability to self-correct many errors.


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