The DOL recently announced it will hold a virtual public hearing regarding a proposed amendment to the prohibited transaction exemption filing and processing procedures. The DOL is also reopening the comment period for the proposed amendment.
ERISA and the Code generally prohibit a plan fiduciary from causing the plan to engage in a variety of transactions with certain related parties (including sponsoring employers, affiliates and service providers) unless a statutory or administrative exemption applies. However, the DOL and IRS have the authority to grant individual or class administrative exemptions from the prohibited transaction rules under certain conditions.
The DOL is also responsible for maintaining procedures for granting exemptions, including the application and documentation requirements. On March 9, 2022, the DOL proposed rules to update the application process for prohibited transaction exemptions. The proposed rule clarified the types of information and documentation required to complete an application to the DOL and expanded opportunities for applicants to submit information electronically. Please see our prior article for further details on the proposed rule.
The public hearing will be held on September 15, 2022, and (if necessary) September 16, 2022, via WebEx, beginning at 9:00 a.m. EDT. The comment period for the proposed amendment will be reopened on September 15, 2022. Employers who sponsor ERISA plans, and particularly those considering filing an application for a prohibited transaction exemption, should be aware of the hearing and additional comment period on the proposed rule.