DOL Issues Final Amendments to VFCP
The Department of Labor (DOL) has released a final amendment updating the Voluntary Fiduciary Correction Program (VFCP), along with a final amendment to Prohibited Transaction Exemption (PTE) 2002-51, to permit certain transactions identified in the PTE. The VFCP allows plan officials to avoid potential civil enforcement actions and civil penalties under ERISA if eligible transactions are voluntarily corrected in a manner that meets the program’s requirements.
According to a fact sheet, the VFCP update provides for a new Self-Correction Component (SCC) which allows plan sponsors to self-correct certain delinquent contributions and loan repayments and eligible inadvertent loan failures without submitting a VFCP application to the DOL. Retained in the final rule is a requirement that the plan sponsor provide EBSA with a notice of the self-correction through an online VFC Program web tool.
The final amendments to VFCP and the PTE are effective 60 days after publication in the Federal Register. The fact sheet notes that this date will be March 17, 2025.
