On Jan. 15, 2025, DoL issued adopted exemption amendment in the federal register.
On the same day, DOL issued amended and restated VFC program, see #153958.
Amends PTE 2002-51 to simplify and expand the VFC Program and exemptive relief to make the Program and exemption easier to use and more useful for employers/users.
PTE 2002-51 amendments provide excise tax relief for transactions corrected pursuant to self-correction feature in the 2025 VFC Program and make administrative changes.
This amendment to PTE 2002-51 will be in effect on Mar. 17, 2025.
On Nov. 20, DoL amended voluntary fiduciary correction exemption.
DoL amended Prohibited transaction exemption (PTE) 2002-51, exemption for certain transactions identified in department's Voluntary Fiduciary Correction (VFC) Program.
Proposed in connection with amendments, reinstatement of VFC program, #153958.
Background
VFC program allows persons who may have engaged in a fiduciary duty breach under employee retirement income security act (ERISA) (29 USC 18) to correct the breach.
Voluntarily apply for relief from enforcement actions and certain breach penalties.
PTE 2002-51 is a related class exemption that provides an exemption from excise taxes imposed by the Internal Revenue Code (IRC) for certain transactions corrected.
VFC PTE 2002-51 Exemption
Excise tax relief is available for transactions that are corrected under Self-correction feature (SC Component) established in the amended and reinstated VFC program.
Transactions would be required to comply with the applicable exemption conditions.
Including requirement that delinquent contributions may not have been transmitted to the plan more than 180 calendar days from the date they were received or payable.
Exemption will apply only if the applicant receives an EBSA no-action letter pursuant to the VFC Program; self-correctors will receive email acknowledgment instead of letter.
Eliminated frequency of use limitation; exemption available for a sale of real property by an affiliate of employer sponsoring plan, to plan, and to the leaseback of property.
Proposed exemption to notice of interest person requirements for self-correctors.
Self-correctors using exemption are not required to provide a copy of the completed IRS Form 5330 along with proof of payment to the appropriate EBSA Regional Office.
Required self-correctors to retain a copy of Form 5530 and proof of payment to plan.
Consultation
Written comment on the proposed PTE 2002-51 amendments due by Jan. 20, 2023.
Nov. 21, 2022 Fed Reg Proposal
On Nov. 21, 2022, DoL published proposed PTE amendments in the federal register.
Jan. 2025 Final PTE 2002-51 Exemption
On Jan. 15, 2025, DoL issued adopted exemption amendment in the federal register.
On the same day, DOL issued amended and restated VFC program, see #153958.
Amends PTE 2002-51 to simplify and expand the VFC Program and exemptive relief to make the Program and exemption easier to use and more useful for employers/users.
PTE 2002-51 amendments provide excise tax relief for transactions corrected pursuant to self-correction feature in the 2025 VFC Program and make administrative changes.
This amendment to PTE 2002-51 will be in effect on Mar. 17, 2025.
