DOL Proposes Self-Correction Option And Other Changes To Voluntary Fiduciary Correction Program

The U.S. Department of Labor (the "DOL") proposed changes to its Voluntary Fiduciary Correction Program (the "VFCP") in November for the first time since 2006. The most significant change is the addition of a self-correction option for delinquent deposits of participant contributions and loan repayments. The other changes clarify and expand certain existing aspects of the VFCP. The DOL also proposed conforming changes to the prohibited transaction class exemption, PTE 2002-51, associated with the VFCP.

Although the proposal of a self-correction option has created a "buzz," the proposed option would only be available if certain conditions are satisfied, including the following:

• The employer remits the delinquent participant contributions or loan repayments within 180 calendar days of withholding or receipt;