The Department of Labor’s Employee Benefits Security Administration (EBSA) proposed updates to their Voluntary Fiduciary Compliance Program (VFCP), which would allow a self-correction component.
The EBSA proposal includes a new self-correction feature for certain failures to timely transmit participant contributions (and participant loan repayments) to pension plans.
This feature will allow plan sponsors and to notify EBSA electronically that they have self-corrected certain failures to send participant contributions and loan repayments to pension plans on time. Self-correction could only be used if the following conditions are met:
- Participant contributions or loan repayments to the plan must be remitted no more than 180 calendar days from the date of withholding or receipt.
- Lost earnings must not exceed $1,000.
- The plan or self-corrector must not be under investigation.
- 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.