On Jan. 15, 2025, DoL issued amended and restated VFC program in federal register.
Published fact sheet on 2025 updates, including PTE 2002-51 exemption, see #154218
2025 VFC Program update adds a self-correction component for specific transactions.
The amendments to the Program simplify and expand the VFC Program to make the Program easier to use and more useful for employers and other users of the relief.
Specifically, adds a self-correction feature for delinquent transmittal of participant contributions and loan repayments to a pension plan under certain circumstances.
Clarifies some existing transactions eligible for correction under the VFC Program.
Expands the scope of other transactions currently eligible for correction; and simplify certain administrative or procedural requirements for participation in VFC Program.
Implements section 305(b) of SECURE 2.0 Act by adding self-correction feature.
The amendments to the VFC Program are effective on Mar. 17, 2025.
On Nov. 18, DoL reported proposed updates re correction of violations.
DoL reported its Employee benefits security administration (EBSA) proposed improvements to its Voluntary fiduciary Correction (VFC) Program for employers.
Including self-correction component for employers who fail to send employee salary withholding contributions or participant loan repayments to retirement plans timely.
Will make it easier and more cost-effective for plan officials to correct violations.
Proposed Amendments
Clarify some existing transactions that are eligible for correction under the program.
Expand the scope of other transactions currently eligible for correction under program.
As well as simplify administrative or procedural requirements under the program.
Amend the associated prohibited transaction class exemption, known as PTE 2002-51.
Self-Correction Component
Enable employers, plan officials to notify electronically they have self-corrected failures
Can only be used if conditions met: contributions/loan repayments to plan must be remitted no more than 180 calendar days from the date of withholding or receipt.
Lost earnings must not exceed $1,000 calculated from date of withholding or receipt.
Plan or self-corrector must not be under investigation as defined in the program.
Self-correctors must use the program’s online calculator to calculate lost earnings and an online web tool to complete and file the self-correction component notice.
Must also complete and retain the self-correction retention record checklist.
Consultation
Written comments on amended VFC Program should be submitted by Jan. 20, 2023.
Nov. 20, 2022, DoL Proposed Rule
On Nov. 20, 2022, DoL published proposed VFC program rule, comments due Jan. 20.
On Nov. 20, 2022, DoL amended VFC program exemption from excise taxes, #154218.
Nov. 21, 2022 DoL Fed Reg Publication
On Nov. 21, 2022, DoL published VFC program rule for comments in federal register.
Reopened an additional 60 days to gather comments on issues related to the program to implement consolidated appropriations act's (PL 117-103) requirements, #131554.
Feb. 14, 2023 Fed Reg Comment Extension
On Feb. 14, 2023, DoL published notice to reopen the VFC program comment period.
Written comments on the proposal must be submitted on or before Apr. 17, 2023.
Jan. 2025 DoL Final Rule
On Jan. 15, 2025, DoL issued amended and restated VFC program in federal register.
Published fact sheet on 2025 updates, including PTE 2002-51 exemption, see #154218
2025 VFC Program update adds a self-correction component for specific transactions.
The amendments to the Program simplify and expand the VFC Program to make the Program easier to use and more useful for employers and other users of the relief.
Specifically, adds a self-correction feature for delinquent transmittal of participant contributions and loan repayments to a pension plan under certain circumstances.
Clarifies some existing transactions eligible for correction under the VFC Program.
Expands the scope of other transactions currently eligible for correction; and simplify certain administrative or procedural requirements for participation in VFC Program.
Implements section 305(b) of SECURE 2.0 Act by adding self-correction feature.
The amendments to the VFC Program are effective on Mar. 17, 2025.
