While many assume the greatest source of retirement plan liability is the plan’s investments, in reality the vast majority of lawsuits and regulatory actions involve failures in administration.

The Employee Benefit Security Association’s (EBSA) Voluntary Fiduciary Correction Program (VFCP) and Delinquent Filer Voluntary Compliance Program (DFVCP) encourage the correction of violations of ERISA by providing significant incentives for fiduciaries and others to self-correct. 2016 results may surprise you:

  • 1,490 applications for the Voluntary Fiduciary Correction Program (VFCP)
  • 22,070 applications for the Delinquent Filer Voluntary Compliance Program (DFVCP)
  • 2,002 civil investigations
  • 67.7% resulted in payment or other corrective action
  • EBSA restored over $777.5M to employee benefit plans, participants and beneficiaries
  • 333 criminal investigations; indictment of 96 indivudals—including plan officials, corporate officers and service providers for offenses related to employee benefit plans

The IRS Top Ten List Of Common VCP Submissions

  1. Failure to amend for tax law changes
  2. Incorrect definition of compensation
  3. Failure to include eligible employee or exclude ineligibles
  4. Loan errors
  5. Impermissible in-service withdrawals
  6. Required Minimum Distribution errors
  7. Employer eligibility failure
  8. ADP/ACP failure not corrected timely
  9. Failure to provide minimum top heavy benefit
  10. Exceeding maximum contribution limits

Sources: 2016 data from IRS, DOL, and federal court system websites