PWBA Answers Frequently Asked Questions about the Voluntary Fiduciary Correction Program

Archived News Release — Caution: Information may be out of date.

Washington, DC - The U. S. Department of Labor’s Pension and Welfare Benefits Administration today released guidance to make it easier for the employee benefit community to use the Voluntary Fiduciary Correction Program (VFCP) in complying with the Employee Retirement Income Security Act.

Assistant Secretary Ann L. Combs said, “Today’s guidance clarifies aspects of the program relating to delinquent employee contributions and the calculation of money owed to a plan. As part of our ongoing compliance assistance efforts, we hope this guidance will encourage plan sponsors to use the program and avoid enforcement actions and civil monetary penalties. The guidance also will assist service providers who prepare applications under the program to ensure completeness and accuracy of their submissions.”

The final VFCP, published in the March 28, 2002 Federal Register, allows plan officials, sponsoring employers or parties to affected transactions to voluntarily correct specific violations of the law. Applicants must fully correct any prohibited transactions, calculate any losses and restore those losses with earnings or profits, and distribute any supplemental benefits owed to eligible participants and beneficiaries. If properly corrected, plan officials will receive a “no action” letter indicating there will be no further enforcement action by the Labor Department on the corrected transaction.

PWBA received questions and public comments asking for clarification on how to calculate earnings under the VFCP for delinquent employee contributions owed to pension plans. The guidance provides answers to frequently asked questions about specific factual situations and provides hypothetical examples on acceptable calculations of lost earnings.

The new guidance can be obtained on the Internet or by contacting a local regional office by calling PWBA's Toll-Free Employee & Employer Hotline number, 1.866.275.7922.

U.S. Department of Labor news releases are accessible on the Internet. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the Central Office for Assistive Services and Technology. Please specify which news release when placing your request. Call 202.693.7773 or TTY 202.693.7775.

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Archived News Release — Caution: Information may be out of date.