Voluntary Fiduciary Correction (VFC) Filing

One of my clients got a letter about prohibited transactions and the opportunity to correct via the VFC program.  This stems from the accountant marking on the Form 5500 that there were delinquent 401(k) contributions/loan repayments.

We've gone through making everyone whole, with charging the employer interest on the late payments.

My question is what's involved in responding to the VFC program?  Is it simply a letter aknowledging the deficiency and outlining what has been done to:

1) Correct the past issue
2) Prove that steps have been taken to ensure it isn't repeated

Or are there actual forms that need to be completed (similar to the VCP program)?  This isn't something I've done before, so I wasn't sure.

Thanks everyone!

There are specific requirements as to what needs to be included in the filing.  While it doesn't *need* to be in the DOL's suggested format, they do provide a fillable .pdf form that essentially forces you to include the appropriate information.  They also have a "checklist" that needs to be completed and I believe filed as well.  See here for an overview:

https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/enforcement/oe-manual/voluntary-fiduciary-correction-program

and here, for the model application form and checklist:

https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/correction-programs/vfcp/model-application-form

BTW, the DOL does not consider the breach to be cured without a VFCP filing (though many disagree).  It's a no-cost filing and give you an insurance policy in the form of a no-action letter.  There also is a Form 5330/excise tax payable that needs to be done - but the DOL provides a class exemption from the PT if you calculate the excise tax, and instead of remitting it to the IRS it's deposited into the plan (with some notice requirements, etc.  See here:

https://www.federalregister.gov/documents/2006/04/19/06-3675/amendment-to-prohibited-transaction-exemption-2002-51-pte-2002-51-to-permit-certain-transactions

Good luck!