By Paul Mulholland
The Department of Labor has proposed a rule, released on November 21, that aims to simplify and expand its Voluntary Fiduciary Correction Program.
If adopted, the rule new would allow fiduciaries to self-correct for participant contributions that are not invested or participant loan repayments that are not repaid and then notify the DOL after the fact. Under current rules, fiduciaries have to apply to the DOL for permission to correct the issue. Other erroneous transactions must continue to be fixed under current rules.
In order to be eligible for the self-correction method, the error would also need to be no more than 180 days old and the total participant losses cannot exceed $1,000.