A tool exists to assist plan sponsors in determining the appropriate amount to restore to a retirement plan under the Voluntary Fiduciary Correction Program (VFCP) when earnings have been lost due to a fiduciary breach. This calculation often involves determining what the plan assets would have earned had the breach not occurred, and then subtracting the actual earnings to arrive at the lost earnings amount. For example, if an improper delay in transferring funds from a participant’s account resulted in the account earning less than it would have in a more timely manner, this tool helps quantify the necessary restoration.
Accurately calculating lost earnings is crucial for successful participation in the VFCP. Correcting these errors demonstrates a commitment to fiduciary responsibility and allows plan sponsors to avoid more severe penalties that could arise from a formal audit. Historically, calculating these losses manually was a complex and time-consuming process. The availability of tools designed for this purpose streamlines the correction process, promoting greater compliance and protecting the interests of plan participants.
