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DOL wrote a letter to one of my client (large-audited plan sponsor) to consider applying for the VFC program to formalize the late contribution violation correction. The 2nd half of 2015 and the 1st half of 2016 plan years contribution transmission were late because the plan sponsor switched payroll service company. When the annual account valuation was performed the following year, the late contribution violation was discovered, corrected and reported on the Form 5500. The lost earnings was calculated using DOL calculator and each participant portion of the lost earnings were deposited in to participants' accounts. Question: 1) Does the prohibited transaction exemption 2002-51 in which the deferral deposit is not more than 180 day late applies to the principal? Or does it include the date the lost earning deposit into participants' deferral accounts? 2)Is this permissible to use the VFC program, section 5(e) - de-minimus exception to amounts less than $20, and not to write a check for former plan participants who were already paid out but allocated lost earnings as small as $0.10 at a later time? 3)How does the plan allocate the excise tax paid to the plan on the lost earnings to fully correct this prohibited transaction? How about the de-minimus amount for prior paid plan participants reallocated? Do the excise tax and de-minimus amounts sit in the plan suspense account to be reallocated as employer contribution to all current plan participants? Any help to any part of my questions are highly appreciated.