The U.S. Department of Labor (DOL) has implemented significant updates to its Voluntary Fiduciary Correction Program (VFC), streamlining the process for retirement plan managers to self-correct transaction errors under the Employee Retirement Income Security Act (ERISA).
The changes, announced Tuesday by the DOL’s Employee Benefits Security Administration (EBSA), aim to make correcting fiduciary breaches more efficient while expanding access for plan managers.
Simplified Self-Correction for Fiduciary Breaches
The updated program introduces a self-correction feature, allowing plan managers to electronically notify the EBSA of specific errors, such as delayed 401(k) contributions or untimely loan repayments. Previously, managers were required to submit an application for EBSA review and approval, adding complexity and cost.
“The Employee Benefits Security Administration is pleased to provide these improvements to our Voluntary Fiduciary Correction Program so that employers and other plan officials can take advantage of streamlined tools to correct legal violations, and America’s workers get full protection for their hard-earned benefits,” said Lisa M. Gomez, Assistant Secretary for Employee Benefits Security.
Expanded Scope and Compliance Adjustments
The revisions include an updated exemption under ERISA’s prohibited transaction rules, simplifying compliance for managers correcting errors. These changes respond to feedback from employers and plan officials seeking more efficient ways to address fiduciary issues.
