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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
As we reported last week, the Employee Benefits Security Administration (EBSA) has revised the Voluntary Fiduciary Correction Program (VFC Program) to include more eligible transactions and relief from civil penalties for transactions involving health and welfare plans, among other changes. The revised VFC Program is effective beginning May 19, 2006. In addition, a final amendment to the existing VFC Program's class exemption, PTE 2002-51, was issued concurrently, which expands the relief from excise taxes to the sale of illiquid assets and certain settlor expense violations included in the finalized VFC Program.
The VFC Program, initiated in 2002, and revised in April 2005, is intended to encourage employee benefit plan sponsors, officials, parties in interest, and others to voluntarily correct potential breaches of fiduciary duty under ERISA and thereby avoid possible civil penalties under ERISA §502(l). The newest release will supersede both the April 2005 version and the original Program (see CCH Pension Plan Guide ¶19,953C and ¶19,953A, respectively).
The revised VFC Program authorizes relief from the imposition of potential civil penalties under ERISA §502(i) when correction is undertaken with respect to welfare plans and nonqualified pension plans in accordance with the Program. The VFC Program maintains the same four-step corrective procedure outlined in the prior version, but expands the 19 covered transactions (see CCH Pension Plan Guide Newsletter, Report No. 1576, April 18, 2005) to include the sale of illiquid assets.
The revised Program reflects public comments and includes:
the expansion and simplification of eligible transactions;
streamlined documentation and clarified eligibility requirements;
a model application form;
clarification of what constitutes "under investigation" allowing more entities to qualify for the program, and
relief from civil penalties for transactions involving health and welfare plans.
The Program describes how to apply for relief, the specific transactions covered, acceptable methods for correcting violations, and examples of potential violations and corrective actions. Applicants that satisfy the terms and conditions of the Program receive a "no-action letter" from EBSA and are not subject to civil monetary penalties. A checklist (reproduced in Appendix B) is required to be submitted with an application to ensure that the application is complete. The checklist must be signed and dated.
For more information on this and related topics, consult the CCH Pension Plan Guide.
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