Late Plan Deposits: When Self-Correction Applies

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The Labor Department restatement of the Voluntary Fiduciary Correction Program at 90 FR 4192 has been in force since March 17, 2025. The Employee Benefits Security Administration amendments (RIN 1210-AB64) add a self-correction component for delinquent transmittal of participant contributions and loan repayments to a pension plan under named conditions, and they implement SECURE the applicable section Act section 305 for certain participant-loan failures self-corrected under the IRS Employee Plans Compliance Resolution System. Self-correction is available only for the transaction types the rule names, and the notice step is not optional.

What is in force now?

The DATES paragraph states, verbatim, "The amendments to the VFC Program contained in this document are effective on March 17, 2025." The document was published January 15, 2025. A retirement-plan adviser or third-party administrator fixing late participant deposits is working under that live program, not under the 2006 application-only path.

The document also amends associated prohibited-transaction relief in PTE 2002-51, published in the same issue of the Federal Register. This page covers the VFC Program restatement at 90 FR 4192. It does not substitute for reading PTE 2002-51.

This brief is drawn from a sealed index of 1086 federal rules from 11 agencies published September 1, 2023 through September 1, 2026.

Source: Federal Register / eCFR.

What does the rule require?

The abstract states that the document contains an amended and restated Voluntary Fiduciary Correction Program under title I of ERISA. The Program is designed to encourage correction of fiduciary breaches and compliance with the law by permitting persons to avoid potential Department of Labor civil enforcement actions and civil penalties if they voluntarily correct eligible transactions in a manner that meets the requirements of the Program. The amendments add a self-correction feature for delinquent transmittal of participant contributions and loan repayments to a pension plan under certain circumstances; clarify some existing transactions; expand the scope of other transactions; and simplify certain administrative or procedural requirements. They also implement section 305(b)(2) and (3) of the SECURE the applicable section Act of 2022 by adding a self-correction feature for certain participant loan failures self-corrected under the IRS's EPCRS (as described in Rev. Proc. 2021-30, or any successor guidance).

Eligible applicants that satisfy the application process still receive a "no action" letter. Self-correctors that satisfy the SCC terms do not receive a no-action letter, but the preamble states that compliance with the Program's terms will avoid the imposition of civil monetary penalties or an EBSA civil enforcement action against the SCC participant. EBSA reserves the right to investigate to determine the truthfulness of the SCC notice and to confirm the corrective action was taken.

The Program is voluntary. It is not a new duty to file. It is the path the Department offers if a plan official wants the relief the Program describes. An insurance agency or TPA that never uses VFCP is not, by that fact alone, out of a mandate this document creates. Late deposits can still be fiduciary breaches under title I of ERISA. This page does not convert the Program into a filing obligation the abstract does not state.

When does self-correction apply to late deposits?

The differentiator is the condition list. Eligibility to use the SCC in section the applicable section(b) is conditioned on Lost Earnings on the delinquent participant contributions or loan repayments being a dollar amount the rule does not restate here or less, excluding any excise tax amounts paid to the plan under PTE 2002-51. The delinquent amounts must have been remitted to the plan within 180 calendar days from the date of withholding from participants' paychecks or receipt by the employer. Those two caps are what keep a delinquency in self-correction rather than in the full application process.

Correction amounts under the SCC are the Principal Amount plus Lost Earnings. Lost Earnings must be paid from the "Date of Withholding or Receipt" and must be determined using the online calculator. That start date is a special SCC rule. It is earlier than the ordinary VFCP application calculation, which begins on the earliest date the amounts could reasonably have been segregated from the employer's general assets under 29 CFR Part 2510. The preamble states that the cost of correction cannot be paid from plan assets, including participant accounts or forfeiture accounts.

The notice step is not optional. Section the applicable section(b)(2)(iii) requires an electronically filed SCC notice in place of the paper application. The notice must include the self-corrector's name and email; the plan name; the plan sponsor's nine-digit EIN and the plan's three-digit PN; the Principal Amount; Lost Earnings and the date paid to the plan; the Loss Date (the Date(s) of Withholding or Receipt); and the number of participants affected. The SCC notice must be submitted electronically to EBSA using the online VFC Program web tool on EBSA's website.

Self-correctors must also prepare the SCC Retention Record Checklist in appendix F and provide the completed checklist and required documentation to the plan administrator. A plan fiduciary with knowledge of the transaction, and each Plan Official seeking relief, must sign the penalty of perjury statement the preamble quotes.

The SCC is available in connection with any pension plan regardless of participant count or plan assets, so long as the applicant is eligible and meets those conditions. It is not described as covering delinquent contributions to welfare plans; those remain under other Program sections the table of contents names. The rule does not say a late deposit above the a dollar amount the rule does not restate here Lost Earnings cap, or remitted after 180 calendar days, can be self-corrected under section the applicable section(b). Those facts go to the application process, if they go to VFCP at all.

A second self-correction component in section the applicable section(c) covers eligible inadvertent participant loan failures self-corrected under IRS EPCRS. That is a different transaction type. Do not treat a late 401(k) deposit and a loan-document failure as the same SCC.

Who has to comply?

The Program is used by employers and other persons in a position to correct a Breach, whom the document calls Plan Officials. Insurance agencies and TPAs that administer or advise retirement plans are often the people who discover a late deposit, calculate Lost Earnings, and decide whether SCC or a full application is the path. They are not named as a new class of filer. They are the operational readers of the condition list.

The VFC Program will continue to be administered in EBSA Regional Offices. The abstract is about persons who voluntarily correct eligible transactions. The rule does not say every late deposit must be submitted through VFCP. The rule does not state a civil-penalty dollar amount for a late deposit that is not corrected through the Program; it describes relief from potential civil enforcement actions and civil penalties if the Program's terms are met.

the annual return/report reporting of delinquent participant contributions is not waived. The preamble states that the Program does not relieve plans from reporting delinquent participant contributions on the the annual return/report or the annual return/report-SF, including after an SCC correction.

Where do insurance agencies commonly fall short?

Agencies and TPAs commonly treat every late deposit as a full VFCP application, or they treat every late deposit as "self-correctable" without reading the a dollar amount the rule does not restate here and 180-day gates. Both errors miss the condition list.

A second pattern is skipping the SCC notice because the annual return/report will mention the delinquency later. The Department retained the electronic notice. It is not optional, and the annual return/report is not a substitute.

A third pattern is paying Lost Earnings from forfeitures. The Program continues to forbid paying the cost of correction from plan assets, including forfeiture accounts. A "we netted it against the suspense account" file is not the correction the SCC describes.

A fourth pattern is starting Lost Earnings on the segregation date used in a full application, instead of the Date of Withholding or Receipt the SCC requires, or skipping the online calculator. Those are SCC conditions, not preferences.

A fifth pattern is treating a welfare-plan late contribution, or a deposit remitted on day the later, as if section the applicable section(b) still applied. The rule names the transaction types. Self-correction is not a general late-money tool.

This page does not invent examination counts. Those figures are not in the closed fact set.

How can an agency or TPA self-audit late deposits now?

1. List every late participant contribution or loan repayment to a pension plan discovered since March 17, 2025, with the Date of Withholding or Receipt and the date the money actually reached the plan.

2. Run Lost Earnings through the online calculator from that withholding-or-receipt date. If the amount exceeds a dollar amount the rule does not restate here, stop SCC and consider the full application path.

3. If remittance was more than 180 calendar days after withholding or receipt, stop SCC.

4. If both gates pass, pay Principal Amount plus Lost Earnings from sources other than plan assets, file the electronic SCC notice with every required data element, and complete the retention checklist and penalty of perjury statement.

5. Confirm the annual return/report reporting is still on the calendar. SCC does not erase that line.

6. Route any file that is missing the notice, the checklist, or the calculator print to the producer or plan administrator who owns the plan.

Relius is retirement-plan administration software used to record contributions, loans, and participant accounts. Employee Navigator is benefits-administration software many agencies use for employer benefit enrollments and payroll-adjacent data. In the readiness pass, use Relius to date withholdings, remittances, and affected headcount, and use Employee Navigator only where it is the source of the withholding date for a given employer. Neither product files the SCC notice. Neither product decides that Lost Earnings are a dollar amount the rule does not restate here or less within the meaning of section the applicable section(b).

Related reading on this site includes the insurance compliance documentation checklist, the eight-step insurance policy renewal workflow, and catch-up contribution rules for retirement plans. Those pages are adjacent operations. This page is VFCP self-correction.

What can be automated and what needs a person?

Reconcile the book of business against the change: each plan maps to the notice, form, or disclosure the rule now requires and the date it is due. US Tech Automations flags plans still running only the old application-only VFCP wording, or missing an SCC notice after a qualifying late deposit, and routes the amendment to the producer or plan administrator.

A workflow can compare withholding dates to remittance dates, open a task when 180 days are approaching, and remind the owner that an electronic notice is due. A workflow cannot certify Lost Earnings, cannot sign the penalty of perjury statement, and cannot decide that a welfare-plan deposit belongs in section the applicable section(b). Those are human readings of 90 FR 4192.

US Tech Automations is flag-and-route. The plan official still calculates, notices, and signs.

The rule does not say how many times a plan may use SCC before EBSA inquires; the Department declined a hard frequency cap and said it would monitor. The rule does not state a dollar civil penalty for a late deposit left uncorrected. Where the rule is silent, write "the rule does not say."

Key Takeaways

• The VFCP restatement at 90 FR 4192 (RIN 1210-AB64) has been effective since March 17, 2025.

• Self-correction of late participant contributions and loan repayments to a pension plan requires Lost Earnings of a dollar amount the rule does not restate here or less and remittance within 180 calendar days of withholding or receipt.

• The electronic SCC notice, retention checklist, penalty of perjury statement, and online-calculator Lost Earnings from the Date of Withholding or Receipt are required, not optional.

• Correction costs cannot be paid from plan assets, including forfeitures; the annual return/report reporting of the delinquency is not waived.

• A second SCC covers certain participant loan failures self-corrected under IRS EPCRS; that is a different transaction type.

• Automation can flag dates and missing notices; a plan official still calculates, files, and signs.

What questions come up in practice?

Can any late 401(k) deposit be self-corrected?

No. Section the applicable section(b) applies to delinquent participant contributions and loan repayments to a pension plan when Lost Earnings are a dollar amount the rule does not restate here or less and the money reached the plan within 180 calendar days. Other late deposits are not in that SCC.

Is the SCC notice optional if the annual return/report will report the delinquency?

No. The preamble retains the electronic SCC notice and states that the annual return/report reporting is not an adequate substitute because it may occur many months later.

May the employer use forfeitures to pay Lost Earnings?

No. The Program requires that the cost of correction not be paid from plan assets, including forfeiture accounts.

Does a self-corrector get a no-action letter?

No. The preamble states that SCC participants do not receive a no-action letter. Compliance with the terms is what the document describes as avoiding civil monetary penalties or an EBSA civil enforcement action against that participant, subject to verification.

What is the second self-correction feature?

Section the applicable section(c) covers eligible inadvertent participant loan failures self-corrected under IRS EPCRS, implementing SECURE the applicable section Act section 305. It is not the late-deposit SCC.

Can Relius or Employee Navigator file the SCC notice?

No. Those systems can hold contribution and withholding dates. The SCC notice must be submitted electronically to EBSA through the VFC Program web tool, and a plan official signs the penalty of perjury statement.

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Every date, citation, RIN, CFR reference, and figure in these posts is copied verbatim from the Federal Register and eCFR as of the snapshot date. Nothing is estimated, modeled, or extrapolated. This is not legal or tax advice.

This page is for informational purposes only. It is not legal or tax advice, does not create an attorney-client relationship, and is not a substitute for the rule. Read 90 FR 4192 and the current text of 29 CFR Part 2560 and 29 CFR Part 2570. Consult a qualified professional about a particular plan, deposit, or correction.

Last reviewed: January 15, 2025

The exception path is the agentic workflow layer.