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Comments on the Voluntary Fiduciary Correction Program
Executive Summary

The adoption of the Voluntary Fiduciary Correction Program (the “Program”) by the Department of Labor (the “Department”) is a positive step that should promote compliance with the ERISA fiduciary rules, avoiding potentially costly investigative and enforcement actions as well as statutory penalties. However, a number of aspects of the Program in its current form will limit or discourage its use. The fact that parties correcting prohibited transactions under the Program will continue to be subject to excise taxes will discourage them from using the Program, so that the Department should work with the IRS to remove this impediment. Another problem is that the Program does not permit pre-filing negotiations as to the amount of relief owed or eligibility to use the Program, creating uncertainty that will deter use of the Program. There should be ways to permit at least limited pre-filing discussions, as is currently done under IRS voluntary correction programs for qualified plans. The notice requirement may present a serious deterrent to using the Program, and should be eliminated or at least modified to reduce the burdens involved. In addition, the Department should look to expand over time the types of transactions covered by the Program over the very limited set of transactions currently eligible for relief. Finally, the Department should clarify the Form 5500 implications of making a filing under the Program, the potential uses of Program information and the ability to supplement or amend a Program application.

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