Employers and administrators that want to correct problems with retirement plans will be following a new set of procedures.

The Internal Revenue Service has released new rules for the Employee Plans Compliance Resolution System in Revenue Procedure 2006-27.

The revenue procedure will affect employers and others that come forward to correct plan problems on their own, rather than waiting until IRS examiners detect unintentional violations of IRS rules.

The new system, which updates a compliance system revenue procedure released in 2003, follows the principle that “fees and sanctions should be graduated in a series of steps, so there is always an incentive to correct promptly,” IRS officials write in an overview section at the beginning of the new revenue procedure.

One change will make it clear that an “egregious failure includes providing more favorable benefits to an owner based on a purported collective bargaining agreement where there has in fact been no good faith bargaining,” officials write.

Another change will provide new flexibility for terminating orphan plans, officials say.

A copy of the new voluntary correction program revenue procedure is on the Web