ARTICLE
21 January 2025

BREAKING: DOL Expands The Voluntary Fiduciary Correction Program

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Bass, Berry & Sims

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Earlier today, the U.S. Department of Labor (DOL) published in the Federal Register an updated version of the Voluntary Fiduciary Correction Program (VFCP)...
United States Employment and HR

Earlier today, the U.S. Department of Labor (DOL) published in the Federal Register an updated version of the Voluntary Fiduciary Correction Program (VFCP) under Title I of ERISA. Per the DOL, VFCP "is designed to encourage correction of fiduciary breaches and compliance with law by permitted persons to avoid potential [DOL] civil enforcement actions and civil penalties if they voluntarily correct" errors in accordance with the program. Notably, the update expands the current VFCP by adding a much-anticipated self-correction component for delinquent transmittal of participant contributions and loan repayments to retirement plans in specific circumstances.

Additionally, the updated VFCP provides a self-correction procedure for eligible inadvertent failures of participant loan transactions. Further, the DOL issued a corresponding amendment to Prohibited Transaction Exemption (PTE) 2002-51, which will provide excise tax relief for self-corrected delinquent contributions, similar to the relief that was already afforded to VFCP applicants who received a no-action letter. Both the updated version of the VFCP and the amendment to PTE 2002-51 will be effective on March 17, 2025.

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