The Department of Labor (DOL) might be releasing changes to its Voluntary Fiduciary Correction Program (VFCP).
The White House’s Office of Budget and Management (OMB) received the DOL’s final rule updating the VFCP on November 20th. Usually, OMB has up to 60 days to review proposed guidance.
The DOL’s changes were first proposed in 2022. The VFCP allows plan sponsors to send certain administrative errors to DOL and receive a no-action letter. These include prohibited purchases and sales, improper loans, and late salary deferral contributions.
The proposal would allow some errors to be self-corrected, and the plan sponsors could inform the DOL after they’ve been fixed. Errors eligible for the self-correction program (SCP) would include salary deferral contributions or loan repayments that are not executed promptly, provided that the cost does not exceed $1,000 and is not older than 180 days.
Since late deferral contributions are so frequent, I support this change.
