Procedure for Application for Exemption from the Prohibited Transaction Provisions of Section 408(a) of the Employee Retirement Income Security Act of 1974 (ERISA)
ICR 201007-1210-004
OMB: 1210-0060
Federal Form Document
⚠️ Notice: This information collection may be outdated. More recent filings for OMB 1210-0060 can be found here:
Procedure for Application for
Exemption from the Prohibited Transaction Provisions of Section
408(a) of the Employee Retirement Income Security Act of 1974
(ERISA)
The Department is issuing a
proposed rule that would, if adopted, supersede the existing rule
of procedure governing the filing and processing of applications
for administrative exemptions from the prohibited transaction
provisions of the Employee Retirement Income Security Act of 1974
(ERISA), the Internal Revenue Code of 1986 (the Code), and the
Federal Employees' Retirement System Act of 1986 (FERSA). The
proposed regulation updates the exemption procedure to reflect
various changes in the Department's practices that have evolved
since the current procedural rule was adopted in 1990. Among other
things, key elements of the exemption policies and guidance
currently found in ERISA Technical Release 85-1 (pertaining to
retroactive exemptions) and the Department's 1995 exemption
publication would be consolidated within the text of a unitary,
comprehensive final regulation, thus reducing the regulatory
burdens on applicants for exemptive relief. Sections 2570.34 and
2570.35 of the exemption procedure regulation would be expanded as
follows: all applications would be required to include a chronology
of events leading to the exemption transaction; the specialized
statements from qualified independent appraisers would be amended
to require the appraisal report to be current and not more than one
year old as of the date of the transaction and the appraiser's
rationale, credentials, and a statement regarding the appraiser's
independence from the parties involved in the transaction would
need to be included; a new requirement would be added regarding the
content requirements for specialized statements submitted by
third-party experts other than qualified independent appraisers; a
new qualified independent fiduciary statements would be required
that discloses the independent fiduciary's qualifications, duties,
and current compensation. A new requirement contained in section
2570.43(d) and (e), if adopted, would permit the Department, in its
discretion, to require an applicant to furnish interested persons
with a Summary of Proposed Exemption (SPE). The Departments expects
this requirement to be used in instances where the proposed
transaction is relatively complex, and it is likely that the notice
of proposed exemption may not be readily understandable by
interested persons (i.e., participants and beneficiaries). The SPE,
must be written in a manner calculated to be understood by the
average recipient. Among other things, the SPE must objectively
describe the exemption transaction and the parties thereto, the
reasons why the plan seeks to engage in the transaction, and the
conditions and safeguards proposed to protect the plan and its
participants from potential abuse or unnecessary risk of loss in
the event the Department grants the exemption. Applicants who must
provide interested persons with an SPE also would be required to
furnish the Department with a copy of the SPE for review and
approval before it is distributed to interested persons. Finally,
the Department also proposes to amend §2570.43 to permit applicants
to utilize electronic means (such as e-mail) to deliver notice to
interested persons of a pending exemption, provided that the
applicant can demonstrate satisfactory proof of electronic delivery
to the entire class of interested persons.
On behalf of this Federal agency, I certify that
the collection of information encompassed by this request complies
with 5 CFR 1320.9 and the related provisions of 5 CFR
1320.8(b)(3).
The following is a summary of the topics, regarding
the proposed collection of information, that the certification
covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a
benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control
number;
If you are unable to certify compliance with any of
these provisions, identify the item by leaving the box unchecked
and explain the reason in the Supporting Statement.
Procedure for Application for Exemption from the Prohibited Transaction Provisions of Section 408(a) of the Employee Retirement Income Security Act of 1974 (ERISA)