In 2012, the Department of Labor (DOL) continued a fairly active program of issuing individual exemptions from the prohibited transaction rules of ERISA. These rules generally prohibit, among other things:
- Sale and lending transactions between (i) certain retirement and other plans specified in ERISA and/or the Internal Revenue Code and (ii) a “party in interest” or “disqualified person” to that plan; and
- Self-dealing or conflicted interests on the part of a plan “fiduciary.”
DOL is, however, authorized to grant a conditional or unconditional exemption for an otherwise prohibited transaction if DOL determines that the exemption is (i) administratively feasible, (ii) in the interests of the plan and of its participants and beneficiaries, and (iii) protective of the rights of plan participants and beneficiaries.
DOL published 20 individual prohibited transaction exemptions (PTEs) in 2012, the same number as in 2011. Under DOL’s “EXPRO” procedure, which permits expedited consideration of transactions substantially similar to other transactions for which exemptions have been recently provided, DOL has reported 15, which is more than the eight exemptions granted in 2011.
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