The Department of Labor on Friday reopened a comment period and announced plans to hold a public hearing for a proposal that would change the way plan sponsors and others apply for prohibited transaction exemptions.
The Labor Department's Employee Benefits Security Administration in March proposed amendments to its procedures governing the filing and processing of prohibited transaction exemption applications.
The comment period will reopen Sept. 15, the same day the Labor Department will host its virtual public hearing. Requests to testify at the hearing are due Sept. 8, and the comment period will remain open for approximately 14 days after a transcript of the hearing is published on EBSA's website.
"After consideration of the comments, including a written request for a public hearing, the department has decided to hold a virtual public hearing to provide an opportunity for all interested parties to testify on material factual information regarding the rule," the department said in a filing Friday.
The proposed amendments would, among other things, clarify the types of information and documentation required to complete an application. If enacted, it would require more information, like a description of the material benefits to non-plan parties as a result of the transactions the exemption would permit, and a description of each conflict of interest or potential instance of self-dealing that would be permitted if the exemption is granted.
The proposal would also revise the definitions of a qualified independent fiduciary and qualified independent appraiser and stipulate that communications with the Labor Department before an exemption application is filed are part of the administrative record subject to public review.
Currently, the labor secretary is able to grant exemptions on a class or individual basis on transactions that are otherwise banned under the Employee Retirement Income Security Act of 1974 and Internal Revenue Code if the transaction is administratively feasible, in the interests of participants and beneficiaries and protective of the rights of participants and beneficiaries.
The proposal originally had a 30-day comment period slated to expire April 14, but after receiving letters from interested parties requesting additional time to develop and submit their comments, the Labor Department extended that comment period an additional 45 days to May 29.
