US Department of Labor announces final amendments to six class exemptions
WASHINGTON – The U.S. Department of Labor today announced a final notice of amendments to six class exemptions from the prohibited transaction rules in the Employee Retirement Income Security Act and the Internal Revenue Code.
First proposed in 2013, the amendments comply with Section 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which requires the department to remove any references to credit ratings from its class exemptions and to substitute standards of creditworthiness that the department determines to be appropriate. The amendments relate to credit rating references in the conditions of Class Prohibited Transaction Exemptions 75-1, 80-83, 81-8, 95-60, 97-41 and 2006-16.
In the years since the original proposal, other regulators – such as the U.S. Securities and Exchange Commission – have finalized changes to the treatment of credit ratings under their regulatory regimes. Given the passage of time since the 2013 proposal and to give all interested parties an opportunity to provide comments or new information, the department reopened the comment period in June 2021, and received one generally supportive comment.
“Today’s notice completes a longstanding project to amend the department’s class prohibited transaction exemptions to eliminate references to credit ratings in a manner that is consistent with actions taken by other regulators,” said Acting Assistant Secretary of Labor for Employee Benefits Security Ali Khawar.