[Federal Register Volume 88, Number 30 (Tuesday, February 14, 2023)]
[Proposed Rules]
[Pages 9408-9409]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-02545]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Parts 2550, 2560, and 2570

RIN 1210-AB64


Amendment and Restatement of Voluntary Fiduciary Correction 
Program

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Proposed program amendments and amendments to prohibited 
transaction exemption; reopening of comment period.

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SUMMARY: This document reopens the comment period with respect to 
amendments to the Voluntary Fiduciary Correction Program (VFC Program 
or Program) under Title I of the Employee Retirement Income Security 
Act of 1974, as amended (ERISA), and to the proposed amendment to 
Prohibited Transaction Exemption 2002-51 (PTE 2002-51), both published 
in the Federal Register on November 21, 2022. The Employee Benefits 
Security Administration (EBSA) published the modifications to the 
Program and a proposed amendment to PTE 2002-51 to both simplify and 
expand the original VFC Program, and solicited comment from interested 
persons by January 20, 2023. On December 29, 2022, the Consolidated 
Appropriations Act, 2023, which includes a provision pertaining to the 
VFC Program, was signed into law. The Department is reopening the 
comment period to allow commenters to address any issues raised by the 
new statutory provision.

DATES: The comment periods for the documents published on November 21, 
2022, at 87 FR 70753 and 87 FR 71164, are reopened. Written comments 
should be submitted on or before April 17, 2023. The Department will 
notify the public of the availability of the amended and restated VFC 
Program in a subsequent Federal Register document. The Department will 
also publish any final amendments to PTE 2002-51 in a subsequent 
Federal Register document.

ADDRESSES: You may submit written comments, identified by RIN 1210-
AB64, to one of the following addresses:
     Federal eRulemaking Portal: www.regulations.gov. Follow 
the instructions for submitting comments.
     Mail: Office of Regulations and Interpretations, Employee 
Benefits Security Administration, Room N-5655, U.S. Department of 
Labor, 200 Constitution Avenue NW, Washington, DC 20210, Attention: 
Amendment and Restatement of Voluntary Fiduciary Correction Program.
    Instructions: Persons submitting comments electronically are 
encouraged not to submit paper copies. Comments will be available to 
the public, without charge online at www.regulations.gov, at 
www.dol.gov/agencies/ebsa, and at the Public Disclosure Room, EBSA, 
U.S. Department of Labor, Suite N-1513, 200 Constitution Avenue NW, 
Washington, DC 20210.
    Warning: Do not include any personally identifiable or confidential 
business information that you do not want publicly disclosed. Comments 
are public records and can be retrieved by most internet search 
engines.

FOR FURTHER INFORMATION CONTACT: Yolanda R. Wartenberg, Office of 
Regulations and Interpretations, EBSA, (202) 693-8500, for questions 
regarding the VFC Program amendments in this document; Susan Wilker, 
Office of Exemption Determinations, EBSA, (202) 693-8540, for questions 
regarding the proposed amendments to the associated class exemption PTE 
2002-51; and James Butikofer, Office of Research and Analysis, EBSA, 
(202) 693-8410, for questions regarding the regulatory impact analysis. 
(These are not toll-free numbers.)
    For general questions regarding the VFC Program: contact Dawn 
Miatech-Plaska, Office of Enforcement, EBSA, (202) 693-8691. For 
questions regarding specific applications and self-corrections under 
the VFC Program, contact the appropriate EBSA Regional Office listed in 
Appendix C of the document at 87 FR 71164 (Nov. 21, 2022). (These are 
not toll-free numbers.)
    Customer Service Information: Individuals interested in obtaining 
information from the Department concerning ERISA and employee benefit 
plans may call the Employee Benefits Security Administration (EBSA) 
Toll-Free Hotline, at 1-866-444-EBSA

[[Page 9409]]

(3272) or visit the Department's website (www.dol.gov/ebsa).

SUPPLEMENTARY INFORMATION: The Department of Labor's (Department) 
authority to establish the Voluntary Fiduciary Correction Program (VFC 
Program or Program) derives from its authority to enforce the fiduciary 
standards in Title I of the Employee Retirement Income Security Act of 
1974 (ERISA), 29 U.S.C. 1132(a)(2) and 1132(a)(5), and thereby to 
establish policies on how this authority will be implemented. The 
Department also has the authority under section 408(a) of ERISA (29 
U.S.C. 1108) to issue exemptions from the prohibited transaction rules 
in sections 406 and 407 of ERISA (29 U.S.C. 1106 and 1107) and in 
section 4975 of the Internal Revenue Code (Code).\1\
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    \1\ Under Reorganization Plan No. 4 of 1978, 5 U.S.C. App. at 
237 (2012), the authority of the Secretary of Treasury to issue 
exemptions pursuant to section 4975 of the Internal Revenue Code was 
transferred, with certain exceptions not relevant here, to the 
Secretary of Labor.
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    The Employee Benefits Security Administration (EBSA) originally 
adopted the VFC Program in 2002, and later revised it in 2005 and 
2006.\2\ EBSA designed the VFC Program to encourage employers and plan 
fiduciaries to voluntarily comply with ERISA and allow those 
potentially liable for certain specified fiduciary breaches under ERISA 
to voluntarily apply for relief from civil enforcement actions and 
certain civil penalties, provided they meet the Program's criteria and 
follow the procedures outlined in the Program. Based on a review of the 
current VFC Program, the Department concluded that certain revisions to 
the Program would facilitate more efficient and less costly corrections 
of fiduciary breaches under the Program, encourage greater 
participation in the Program, and respond to requests from stakeholders 
for adjustments based on their experiences using the Program. 
Accordingly, on November 21, 2022, the Department published in the 
Federal Register an amended and restated VFC Program.\3\ On the same 
date, EBSA also published a proposed amendment to PTE 2002-51, the 
Program's associated class exemption, to make certain conforming 
amendments to the class exemption.\4\ The Department solicited general 
comment on any aspect of the VFC Program, including the amendments 
being announced, and furthermore expressed particular interest in 
public comments on whether there are other circumstances in which the 
VFC Program could be integrated with corrections under the Voluntary 
Correction Program of the Internal Revenue Service's Employee Plans 
Compliance Resolution System (EPCRS). The Department requested that 
comments on the amended and restated VFC Program be submitted on or 
before January 20, 2023. For a more comprehensive discussion of the VFC 
Program, please see 87 FR 71164.
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    \2\ 70 FR 17516 (Apr. 6, 2005), 71 FR 20262 (April 19, 2006).
    \3\ 87 FR 71164 (Nov. 21, 2022).
    \4\ 87 FR 70753 (Nov. 21, 2022).
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    H.R. 2617, Consolidated Appropriations Act, 2023 (CAA) was signed 
into law on December 29, 2022. CAA includes a number of provisions 
related to retirement and other types of plans in Division T, which is 
also cited as SECURE 2.0 Act of 2022 (SECURE 2.0). Section 305 of 
SECURE 2.0 provides for expansion of EPCRS to cover any ``eligible 
inadvertent failure.'' The term ``eligible inadvertent failure'' as 
defined in section 305(e) generally includes a failure that occurs 
despite the existence of practices and procedures that satisfy EPCRS 
standards and is not egregious, related to the diversion or misuse of 
plan assets, or related to an abusive tax avoidance transaction. 
Section 305(b) specifically provides for correction of an ``eligible 
inadvertent failure'' relating to a loan from a plan to a participant, 
and furthermore indicates that the Department shall treat any such loan 
failures self-corrected in accordance with applicable requirements as 
meeting the requirements of the VFC Program, although the Department 
may impose reporting or other procedural requirements. Section 305(g) 
contemplates the issuance of further guidance by the Department of 
Treasury (``Treasury'') on EPCRS to take into account the provisions of 
section 305.
    Given the general effect of section 305 of SECURE 2.0 on EPCRS and 
the specific references to the VFC Program in connection with corrected 
loans to participants, the Department is reopening for 60 days the 
period for submitting comments on the amended and restated VFC Program 
and proposed amendment to PTE 2002-51.\5\ The Department is interested 
in comments on what revisions, if any, should be made to the VFC 
Program to reflect the treatment of corrections of loans to 
participants as described in SECURE 2.0 section 305(b). Specifically, 
how should the VFC Program be modified in the future to implement the 
new deeming provision in SECURE 2.0 section 305(b)(2) (``the Secretary 
of Labor shall treat any such failure which is so self-corrected under 
subsection (a) as meeting the requirements of the Voluntary Fiduciary 
Correction Program of the Department of Labor if . . . .'')? For 
example, should Section 7.3 be amended to include a specific paragraph 
treating items self-corrected under EPCRS as meeting the requirements 
of the VFC Program? In addition, should the VFC Program impose 
additional reporting or other procedural requirements for these 
specific corrections, and why? Are changes needed to PTE 2002-51 to 
implement SECURE 2.0 section 305(b)(2)? The Department is interested in 
comments that address these and related issues. The Department also is 
interested more generally in any other aspects of section 305 as it 
affects EPCRS that should be taken into account by the Department in 
making further revisions to the VFC Program and PTE 2002-51.
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    \5\ The Department has advised Treasury of the reopening of this 
comment period, and the Department understands that Treasury and the 
Internal Revenue Service intend to review comments submitted to the 
Department (as well as other stakeholder input) in developing 
updates to EPCRS with respect to section 305 of SECURE 2.0. The 
Department will forward to Treasury comments as they are received.

    Signed at Washington, DC, this 1st day of February, 2023.
Lisa M. Gomez,
Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
[FR Doc. 2023-02545 Filed 2-13-23; 8:45 am]
BILLING CODE 4510-29-P