DOL Proposes Amended Procedures for PTE Filing, Processing

The U.S. Department of Labor’s Employee Benefits Security Administration has announced proposed amendments in its procedures governing the filing and processing of Prohibited Transaction Exemption (PTE) applications. 

According to a press release, the Proposed Exemption Procedure Regulation amends the department’s PTE procedure published in 2011. The DOL says the proposed regulation “would promote the department’s prompt and efficient consideration of all exemption applications” by:

• Clarifying the types of information and documentation required to complete an application.
• Revising the definitions of a qualified independent fiduciary and qualified independent appraiser to ensure their independence.
• Clarifying the content of specific reports and documents applicants must submit to ensure that the department receives sufficient information to make the requisite findings under ERISA Section 408(a) to issue an exemption.
• Updating various timing requirements to ensure clarity in the application review process.
• Specifying items that are included in the administrative record for an application and when the administrative record is available for public inspection.
• Expanding opportunities for applicants to submit information to the department electronically.  

If granted, the proposed exemptions would allow designated parties to engage in transactions that would otherwise be prohibited provided the specified conditions are met.

About the Proposed Exemptions

The proposed exemptions were requested in applications filed under Section 408(a) of ERISA and/or Code Section 4975(c)(2) by Midlands Management Corporation 401(k) Plan, The DISH Network Corporation 401(k) Plan and the EchoStar 401(k) Plan, and The Children’s Hospital of Philadelphia Pension Plan for Union-Represented Employees.

The DOL says that based on the conditions that are included in this proposed exemptions, the DOL has tentatively determined that the relief each of the applicants seeks is administratively feasible; in the interests of the plan and its participants; and protects the rights of plan participants and beneficiaries.

Comments Welcome

The DOL urges plan representatives and other interested parties to provide input on the proposal during the public comment period.

The DOL will accept comments for 45 days after the proposed exemptions are published in the Federal Register, which is to occur on March 9, 2022. 

Comments and requests for a hearing should be sent to the Employee Benefits Security Administration (EBSA), Office of Exemption Determinations, U.S. Department of Labor, Attention: Application No. , stated in each Notice of Proposed Exemption via e-mail to [email protected] or online through http://www.regulations.gov by the end of the scheduled comment period.