Secretary of Labor Hilda L. Solis Print This Page Print This Page  Decrease Text Size Increase Text Size Text Size  Email This Page E-mail This Page

Archived News Release — Caution: Information may be out of date.

U.S. DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

EBSA Press Release: Labor Department Reduces Retriections on Pension Investments [07/31/1996]

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.