Federal regulators have tried to make life easier for employers and others who confess to violating the many complicated laws and regulations that govern employee benefit plans.
The Employee Benefits Security Administration, an arm of the U.S. Labor Department, has published a notice describing a new, streamlined version of the Voluntary Fiduciary Correction Program today in the Federal Register.
The new correction program will take effect in 30 days.
EBSA also has published a related document, an amendment to Prohibited Transaction Exemption 2002-51.
Combined, the notice and the PTE amendment should make it easier for plan fiduciaries to fix errors on their own initiative and to avoid paying excise taxes or civil penalties in connection with efforts to fix errors, EBSA officials say.
Major changes include relief from civil penalties for transactions involving health and welfare plans and publication of a model application form.
Officials emphasize that fiduciaries who want to participate in the program must restore any losses or profits to the plan with interest and distribute any supplemental benefits owed to eligible participants and beneficiaries.
EBSA officials also emphasize that the Labor Department can continue to resolve concerns about plan administration outside the voluntary correction program.
“The department notes that implementation of the final program does not foreclose resolution of fiduciary breaches by other means, including entering into settlement agreement with the departments,” EBSA officials write in a preamble to the official correction program description.
A copy of the final correction program description is on the Web at Document Link
The amendment to the prohibited transaction exemption is on the Web at Document Link