I think that most practitioners would agree that untimely adopted plan documents continues to be one of the more persistent problem for 403(b) plan sponsors, in large part because it is now a historical problem: plan sponsors which missed the original plan document adoption date of 12/31/2008 have to jump through several hoops for their plan to qualify as a 403(b) plan, even if they have since adopted a plan. 
Prior to the new EPCRS, Rev Proc 2013-12, the IRS took several approaches to non-adopters.  First, it issued a formal extension until 12/31/2009 in Announcement 2009-03, if certain rules were met.  For those plans that failed to meet that deadline, it informally took the position that as long as the 2009-3 rules were met, it would generally grant relief on audit. Finally, in certain circumstances it would recognize what Conni calls the “big paper clip” approach to plan documents, permitting a collection of documents, employee communications and evidence of corporate actions to be cobbled together and recognized as the plan document.
2013-12 institutionalizes part of that approach. For VCP “late adopter” filings, the submission is conditioned upon adoption of a plan document which is intended to comply with 403(b); the plan, in operation, must have acted in accordance with a reasonable interpretation of 403(b) during the period of time for which relief is requested; and, for that period, the plan sponsor must have engaged in a compliance review, under which it used its best efforts to find operational problems and to correct them in accordance with the principles under EPCRS.   For Audit CAP, this also appears to be the required correction.
This is a tough requirement, but it reflects the IRS’s intent to compel 403(b) plan sponsors to finally do the hard work necessary to comply with the 2007 regulations.  The IRS has been accommodating over the past several years, recognizing the problems and challenges related to the transition to those new regulations (some of which are yet to be resolved).  But now, it is taking this opportunity to cause “best efforts” compliance and correction activity for a significant number of plans. 
“Best efforts” is really a standard we have rarely, if ever, seen from the IRS in the retirement plan space. It means more than just a “reasonable” effort, or some sort of cursory documentation of some sort of activity. Be prepared to be able to evidence a serious review of the plan’s activities since the effective date of the regulations for that plan. 
And remember, this applies to anyone who missed the deadline, even if they have since adopted the plan.
The world, we are finding, is a very small place. Conni and I are in India, where she is conducting Penserv retirement plan training for certain financial service company IT professionals who are responsible for some pretty impressive software programs which many plan sponsors here in the U.S. use. We have been welcomed graciously, and the staff’s passion and interest in the ERISA and Code technical rules are impressive-and so much akin to that we are used to encountering among our colleagues in the States.
Now, if I could only develop a taste for curry….

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