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Archived News Release--Caution:
information may be out of date.
For more information call: (202) 219-8921
The U.S. Department of Labor today announced rules streamlining the
process under which employee benefit plans subject to the Employee Retirement
Income Security Act seek approval for a wide range of investments and business
transactions. These rules would apply to transactions that are normally
prohibited under federal pension law but pose little or no risk to the pension
plans.
Under the new rules, plans and the business community may be able to
proceed, in as little as 78 days of a request to the Labor Department, to
engage in a transaction which is substantially similar to two individual
exemptions previously granted by the department.
The department proposed the class exemption last November as part of
the Administration's commitment under reinvention and pension simplification to
reduce burdensome rules. The exemption also creates greater efficiency for the
department by freeing resources to examine more complex cases involving waivers
under the law.
Olena Berg, assistant secretary for the Pension and Welfare Benefits
Administration said, "Plans and the business community would have greater
opportunities to conduct billions of dollars in transactions each year.
"Our action reduces delays by expediting approval for those
transactions posing little risk to plans, which can translate into cost savings
and reduced paperwork. The exemption retains safeguards to protect plans and
their assets from misuse."
In order for a plan to qualify for the class exemption, it must
demonstrate to the department that the transaction:
- is substantially similar to those described in two prior individual
exemption s granted; and
- presents little, if any, opportunity for abuse or risk of loss to a
plan's participants and beneficiaries.
The current exemption process generally can take four to six months and
requires the publication of a formal notice in the Federal Register.
The final exemption is scheduled to be published in the July 31 Federal
Register.
Archived News Release--Caution:
information may be out of date.
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