![]() ![]() Participant contributions or loan repayments to the plan must be remitted no more than 180 calendar days from the date of withholding or receipt.The proposed self-correction component can only be used if the following conditions are met: This feature will enable employers and other plan officials to notify EBSA electronically that they have self-corrected certain failures to send participant contributions and loan repayments to pension plans on time. Most significant among the proposed changes is the addition of the self-correction component. Amend the associated prohibited transaction class exemption, known as PTE 2002-51.Expand the scope of other transactions currently eligible for correction and simplify administrative or procedural requirements under the program. ![]() ![]() Clarify some existing transactions that are eligible for correction under the program.EBSA’s proposed changes will do the following: The program allows plan officials to avoid potential civil enforcement actions and civil penalties under the Employee Retirement Income Security Act if they voluntarily correct eligible transactions in a manner that meets the program’s requirements. Department of Labor announced that its Employee Benefits Security Administration has proposed updates to its Voluntary Fiduciary Correction Program, 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. Visit our News Library to read more news stories.The U.S. In addition, the current version of VFCP has reduced the documentation requirements, added correctable transactions, and eliminated the requirement for actual rates of returns.įor more information on this and related topics, consult the CCH Pension Plan Guide. If the transaction involves late deposits of elective deferrals, there is no need for an independent appraiser or fiduciary. There is also a waiver of IRS excise taxes, interest, and penalties for certain prohibited transactions (including late deposits of elective deferrals) corrected under the VFCP provided special rules are followed, and EBSA sends a no-action letter stating that it will not initiate a civil investigation under Title I of ERISA for the transaction described in the letter and providing relief from the civil penalty of 20% of the applicable recovery amount under ERISA §502(l). EBSA provides an online calculator, a model application, and a checklist to use. For late deposits, however, Heming said that it is now cost effective to use the VFCP. Plan administrators have been advising clients to self-correct without going through the VFCP because self-correction was simpler, easier, and less expensive, according to Heming. Heming said that the VFCP has not been widely used. Matheney is the Regional VFCP Coordinator for the San Francisco Region of the Employee Benefits Security Administration (EBSA).ĬCH Note: In 2006, EBSA adopted a final version of the VFCP with modifications proposed in 2005. David Matheney, also speaking at the NIPA Annual Forum & Expo, noted that the DOL will process 2,000 VFCP applications this year. Ryding is head of sales and marketing for Truog-Ryding Company, Inc., and Heming is a partner with Reish, Luftman, Reicher & Cohen. The Voluntary Fiduciary Correction Program (VFCP) is a “great” program and plan fiduciaries/ sponsors who have plan violations that can be corrected under the Program should start using it, according to Marilyn Ryding and Martin Heming, speaking at the 2007 National Institute of Plan Administrators (NIPA) Annual Forum & Expo in Las Vegas, NV on May 8, 2007. CCH® PENSION AND BENEFITS - 6/21/07 Practitioners tout advantages of final version of Voluntary Fiduciary Correction Program ![]()
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