The information on this page is updated by:
EBSA Finalizes VFCP April 2006

EBSA Voluntary Fiduciary Correction Program Updated
Rev. 04/14/05, Rev. 04/27/06 (Above), E-mail Alerts 2005-7, 2006-8

April 14, 2005

Background
The Voluntary Fiduciary Correction Program (VFC Program) of the Department of Labor’s (DOL’s) Employee Benefit Security Administration (EBSA) allows employers to voluntarily correct specific fiduciary breach violations of the Employee Retirement Income Security Act. Applicants must fully correct any violations, restore to the plan any losses or profits with interest, and distribute any supplemental benefits owed to eligible participants and beneficiaries. A “no action” letter is given to plan officials who properly correct violations. The VFC Program was originally issued in the Federal Register of March 28, 2002.
An expanded and simplified VFC Program was published in the April 6, 2005 Federal Register.

In a move towards expediting the availability of these enhancements, the updated program is effective immediately and will be available during the comment period.

The proposed additions to the VFC Program include:

• three new eligible transactions that allow corrections for delinquent participant loan repayments, liquid plan assets sold to interested parties, and participant loans that violate certain plan restrictions on such loans;
  
• simpler methods and an online calculator to determine plan asset restoration amounts;
• streamlined documentation and clarified eligibility requirements, and
• a model application form.
  

Simultaneously, EBSA proposed an amendment to the existing VFC class exemption to permit the sale of illiquid assets. However, this addition will not be effective until the VFCP enhancement is finalized.

Comments should be made before June 6, 2005 and should be addressed to the U.S. Department of Labor, Employee Benefits Security Administration, Room N-5669, 200 Constitution Ave., N.W., Washington, D.C. 20210, Attention: Voluntary Fiduciary Correction Program, or electronically to:
e-ORI@dol.gov.

Bill Grossman, QPA