Using VFC to Correct Late Loan Payment Remittances (Posted April 15, 2004) Technical Tip 40: The following question and answer are from the DOL/EBSA website: Can I use the VFCP [the DOL’s Voluntary Fiduciary Correction Program] to correct a failure to forward participant loan repayments to a plan in a timely fashion? Response: Yes. In Advisory Opinion 2002-2A, the department concluded that, while not subject to the participant contribution regulation (29 C.F.R. §2510.3-102), participant loan repayments paid to or withheld by an employer for purposes of transmittal to an employee benefit plan are sufficiently similar to participant contributions to justify, in the absence of regulations providing otherwise, the application of principles similar to those underlying the final participant contribution regulation for purposes of determining when such repayments become assets of the plan. Specifically, the Advisory Opinion concluded that participant loan repayments paid to or withheld by an employer for purposes of transmittal to the plan become plan assets as of the earliest date on which such repayments can reasonably be segregated from the employer’s general assets. Given the similar treatment of participant contributions and loan repayments, the department has determined that it is appropriate to permit delinquent participant loan repayments to be corrected under the VFCP in the same manner as delinquent participant contributions. [Emphasis added] View all Tips © 2010 Reish Luftman Reicher & Cohen, a Professional Corporation Important notice: Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner's situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation.