Is a lease between a multiemployer apprenticeship fund and its union sponsor an eligible transaction under VFCP?

[rocknrolls2]

I represent a multiemployer apprenticeship fund which leases office space from its building to a union appointing trustees to the fund. From my reading of the 2025 VFCP, it does not appear that the leasing of office space between the union and the fund is eligible for correction under VFCP. Does anyone think differently on this?

[Peter Gulia]

Before considering whether a breach is VFCP-correctable:

Has each fiduciary who might consider a correction consider his or her lawyer’s advice about whether a transaction might, despite the conflicts of interests, be an exempt prohibited transaction? For example:

Class Exemption From Prohibitions Respecting Certain Transactions in Which Multiemployer and Multiple Employer Plans Are Involved, 42 Federal Register 33918 (July 1, 1977).

Class Exemptions From Prohibitions Respecting Certain Transactions in Which Multiemployer and Multiple Employer Plans Are Involved, 41 Federal Register 12740 (Mar. 26, 1976), corrected,41 Federal Register 16620 (Apr. 20, 1976).

Even if an arrangement was and is an exempt prohibited transaction, have the current fiduciaries evaluation the arrangement was or is a breach of fiduciary responsibility?

A prohibited-transaction exemption does not excuse any fiduciary from any responsibility (other than one’s duty not to cause or permit the plan to be involved in a nonexempt prohibited transaction).

This is not advice to anyone.

PTE 1977-10.pdf PTE 1976-1.pdf PTE 1976-1 correction.pdf