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.

If you have any questions about the updated VFCP or potential errors that may need to be corrected, please contact a member of our Employee Benefits team. More information regarding these important changes will be forthcoming on our HR Law Talk blog.

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Photo of Susie Bilbro Susie Bilbro

Susie Bilbro advises clients on all aspects of employee benefit plan design and administration including compliance with ERISA, the Patient Protection and Affordable Care Act (healthcare reform), COBRA and the Internal Revenue Code. She has counseled public and private clients on employee welfare…

Susie Bilbro advises clients on all aspects of employee benefit plan design and administration including compliance with ERISA, the Patient Protection and Affordable Care Act (healthcare reform), COBRA and the Internal Revenue Code. She has counseled public and private clients on employee welfare and pension benefits issues, both in connection with corporate transactions and on day-to-day administration. In addition, Susie has prepared submissions to the IRS and Department of Labor for qualified retirement and welfare benefit plans. Susie also has experience advising clients on executive compensation arrangements.

Photo of Doug Dahl Doug Dahl

Doug Dahl provides technical knowledge and advice to companies on a wide range of federal tax and ERISA matters regarding employee benefits, including qualified retirement plans, executive compensation arrangements and health and welfare plans. Doug regularly assists companies with employee benefit issues that…

Doug Dahl provides technical knowledge and advice to companies on a wide range of federal tax and ERISA matters regarding employee benefits, including qualified retirement plans, executive compensation arrangements and health and welfare plans. Doug regularly assists companies with employee benefit issues that arise during and following various corporate transactions and events, such as mergers, acquisitions, dispositions and bankruptcies.

Photo of Will Gebo Will Gebo

Will Gebo works with clients on the design, implementation and administration of qualified benefit plans, health and welfare benefit plans and deferred compensation packages. He also provides diligence and support on employee benefits and compensation issues arising in mergers, acquisitions and other corporate…

Will Gebo works with clients on the design, implementation and administration of qualified benefit plans, health and welfare benefit plans and deferred compensation packages. He also provides diligence and support on employee benefits and compensation issues arising in mergers, acquisitions and other corporate transactions.

Nicole Roth

Nicole Roth works with clients on the design, implementation, and administration of qualified benefit plans, health and welfare benefit plans, and deferred compensation packages. She also provides diligence and support on employee benefits and compensation issues arising in mergers, acquisitions, and other corporate…

Nicole Roth works with clients on the design, implementation, and administration of qualified benefit plans, health and welfare benefit plans, and deferred compensation packages. She also provides diligence and support on employee benefits and compensation issues arising in mergers, acquisitions, and other corporate transactions.