The Voluntary Fiduciary Correction Program

A1.The relief

Part 21, ch. 3, § A1

An eligible applicant who corrects a listed ERISA Part 4 breach as §§5–7 require generally receives a no-action letter. The letter means EBSA will not open a civil Title I investigation of the applicant's responsibility for the transaction. It also means EBSA will not assess ERISA §502(l) or §502(i) penalties on the correction amount.

Under the Self-Correction Component (SCC), no letter is issued. The self-corrector receives an email acknowledgment, and EBSA gives the same assurance. Agency guidance — formal: §2(a). For reference, §502(l) imposes a 20% penalty on the "applicable recovery amount," meaning amounts recovered under a DOL settlement or a court order in a DOL-brought action. Statute: ERISA §502(l).

A2.Limits

Part 21, ch. 3, § A2

Relief covers only the breach and the applicants identified. The notice gives an example: a letter covering a §406(a)(1)(A) purchase from the sponsor does not cover the §404(a)(1)(C) diversification failure that the purchase caused.

Relief does not bind other agencies or other persons. It also does not preclude:

• criminal referral;
• removal or other injunctive relief;
• IRS referral under ERISA §3003(c);
• §502(c)(2) Form 5500 penalties.

A material misrepresentation voids the letter retroactively. EBSA may still investigate a compliant filer where the statute of limitations would otherwise prejudice it, where there are indications of abuse, or where the correction leaves significant harm uncured. It may also examine other matters, or other plans of the same sponsor, while an application is pending. Agency guidance — formal: §2(b)–(g).

A3.Eligibility and "Under Investigation"

Part 21, ch. 3, § A3

Who may apply. Any "Plan Official" may apply, directly or through a representative. That means a fiduciary, the sponsor, a party in interest, or anyone else in a position to correct the breach. Agency guidance — formal: §3(b)(2), §6.1(b).

Eligibility conditions. All three must hold:

• neither the plan nor the applicant is Under Investigation;
• the application shows no evidence of potential crimes;
• EBSA has not notified the plan in writing that the transaction was referred to the IRS.

Agency guidance — formal: §4(a)–(c).

Definition of "Under Investigation." The plan, a Plan Official, or a representative has received written or oral notice of any of the following:

• an EBSA investigation of the plan, or of the applicant or sponsor for a plan-related act;
• a criminal investigation, by any governmental agency, of the plan, or of the applicant or sponsor for a plan-related act;
• an IRS Employee Plans examination;
• an investigation or examination by the PBGC, a state attorney general, another federal agency, or a state insurance commissioner, of the plan, or of the applicant or sponsor for a plan-related act.

An investigation in the last category does not bar an application if it is disclosed in writing with the application. This cure applies only to applications; such an investigation disqualifies an SCC filing. Two things do not count as an investigation. The first is EBSA contact about a participant complaint, unless the complaint concerns the same transaction and the plan has not yet been made whole. The second is EBSA's review of the auditor's work papers. Agency guidance — formal: §3(b)(3).

Exceptions.

• Third-party crime. A late-deposit application, but not an SCC filing, may proceed despite third-party crime. Three conditions apply: the funds are repaid, law enforcement is notified, and a statement is filed. Agency guidance — formal: §4(b)(2).
• Bulk applications. Despite the Under Investigation bar, a service provider may file a bulk application for ten or more plans, seeking relief only for itself, if the other §4(d) conditions are met. Agency guidance — formal: §4(d).
• Participant loans. The §7.3(c) participant-loan SCC remains available during an investigation, provided EPCRS permits the self-correction. Under Notice 2023-43, EPCRS self-correction is generally unavailable once the IRS examines the plan, which narrows this exception. Agency guidance — formal: §4(e).