US Department of Labor announces reopening of comment period on Voluntary Fiduciary Correction Program
WASHINGTON – The U.S. Department of Labor announced today that its Employee Benefits Security Administration will reopen the public comment period on amendments to its Voluntary Fiduciary Correction Program and the proposed amendment to the associated class Prohibited Transaction Exemption 2002-51.
The program encourages plans to comply with the Employee Retirement Income Security Act and the Internal Revenue Code by self-correcting violations of the law. If plans voluntarily correct eligible transactions and meet the specified requirements, the program and exemption together allow the plans to avoid potential civil enforcement actions and penalties.
“Reopening the comment period will allow the Employee Benefits Security Administration to obtain important public input on implementing the changes mandated by Congress in the SECURE 2.0 Act of 2022 that impact the department’s Voluntary Fiduciary Correction Program,” explained Assistant Secretary for Employee Benefits Security Lisa M. Gomez.
SECURE 2.0 Act of 2022 is the short title of Division T of the Consolidated Appropriations Act of 2023. It includes a number of provisions related to retirement and other types of plans.
On Nov. 21, 2022, EBSA published proposals and invited comments on the proposed program and exemption updates, including a self-correction component for employers who fail to send employee salary withholding contributions or participant loan repayments to retirement plans in a timely manner. The comment period for these proposals closed on Jan. 20, 2023.
After the proposals’ publication, the Consolidated Appropriations Act of 2023 was signed into law. The law includes a provision that requires the program to cover certain violations related to participant loans if self-corrected violations align with the IRS’ Employee Plans Compliance Resolution System. EBSA is reopening the comment period for 60 days to gather additional comments on any issues related to the amendment of the program to implement the act’s requirements.