Prohibited Transaction Exemption

[JRN]

Once the DOL has granted an exemption from the prohibited transaction provisions, how long after does the applicant have to complete the transaction? For example, let's say the DOL approves the proposed sale of property from the Plan to a participant for all cash. As a condition of the exemption, the applicant agrees that the purchase price will be updated to fair market value as of the date of the sale. Once the exemption has been granted, can the applicant in a sense sit on the exemption for some period of time (say, 2 years) before consumating the transaction -- provided of course that none of the facts described in the application have changed?

[Guest erisafried]

I'd be leery of waiting for too long to effect the sale described in the exemption, but a cursory review of some individual exemptions approving the sale of property from a plan/IRA to a disqualified person doesn't reveal a particular deadline. I'd have a look through the individual exemptions involving this sort of transaction (available at the DOL's website and various other on-line services -- BNA, Checkpoint, CCH, etc.) to see if you can find any precedent on point or close to it. If you are still in the application stage and if you anticipate some issues with a prompt transaction, I'd mention that to the DOL and try to nail down a more specific time-frame or else get some assurance about the DOL's expectations. If the exemption request is already under review or has been issued, I'd discuss with whoever at DOL wrote the thing or else put in a call to the "legendary" Gary Lefkowitz (his words, not mine, and a very helpful fellow on PT issues generally).