|
|
|
Release Date: 12/31/2003
Release Number: 03-30
Contact Name: Gloria Della
Phone Number: 202.693.8664
|
Printer Friendly
Version
|
|
|
|
Washington, DC - The U.S. Department of Labor’s
Employee Benefits Security Administration (EBSA) today published a class
exemption to facilitate the settlement of litigation between employee
benefit plans and related parties. |
The
final exemption responds to questions raised by the employee benefits
community concerning whether plans that release legal claims against
related parties in exchange for cash violate the prohibited transaction
provisions of the Employee Retirement Income Security Act (ERISA). The
exemption allows plans to release such claims in exchange for cash,
securities and the promise of additional benefits. The exemption also
allows related parties to pay amounts owed to plans over time. |
The
exemption requires that the terms of the settlement be approved by a
fiduciary not involved in the transaction that was the subject of the
litigation. It also requires the settlement to be reasonable, in light of
the plan’s likelihood of full recovery, the risks and costs of
litigation and the value of foregone claims. The proposal should remove
any uncertainty and allow plan fiduciaries to properly carry out their
responsibilities under ERISA by focusing on the merits of the settlement. |
The
final exemption is published in the December 31, 2003 Federal Register. |
|
U.S. Department of Labor
news releases are accessible on the Internet. The information in this news
release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing
your request. Call 202.693.7773 or TTY 202.693.7755. |
