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Amendment to Class Exemptions, Defining "Employee Benefit Plan"


[Federal Register: March 1, 2002 (Volume 67, Number 41)]
[Notices]
[Page 9483-9485]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01mr02-82]

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DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

[Prohibited Transaction Exemption 2002-13 Application Number: D-10616]


Amendment to Prohibited Transaction Exemption (PTE) 79-15 (44 FR
26979, May 8, 1979); PTE 80-26 (45 FR 28545, April 29, 1980); PTE 80-83
(45 FR 73189, November 4, 1980); PTE 81-6 (45 FR 7527, January 23, 1981
(as Amended at 52 FR 18754, May 19, 1987)); PTE 81-8 (46 FR 7511,
January 23, 1981 (as Amended by 50 FR 14043, April 9, 1985)); PTE 82-63
(47 FR 14804, April 6, 1982); PTE 83-1 (48 FR 895, January 7, 1983);
PTE 84-14 (49 FR 9494, March 13, 1984) PTE 88-59 (53 FR 24811, June 30,
1988); PTE 91-38 (56 FR 31966, July 12, 1991); PTE 95-60 (60 FR 35925,
July 12, 1995); PTE 96-62 (61 FR 39988, July 31, 1996)

AGENCY: Pension and Welfare Benefits Administration, Department of
Labor.

ACTION: Adoption of amendment to certain class exemptions.

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SUMMARY: This document amends certain class exemptions to define the
term ``employee benefit plan,'' as such term is used therein, to
include plans described in section 4975(e)(1) of the Internal Revenue
Code of 1986 (the Code). The amendment affects individuals with
beneficial interests in such plans, as well as the financial
institutions that provide services and products to the plans.

EFFECTIVE DATES: The amendment is effective as of: May 1, 1979 with
respect to PTE 79-15; January 1, 1975 with respect to PTE 80-26;
December 1, 1980 with respect to Section I(B) of PTE 80-83 (the
amendment is effective January 1, 1975 with respect to the remainder of
PTE 80-83); January 23, 1981 with respect to PTE 81-6; January 1, 1975
with respect to PTE 81-8; April 6, 1982 with respect to PTE 82-63;
January 1, 1975 with respect to PTE 83-1; December 21, 1982 with
respect to PTE 84-14; January 1, 1975 with respect to PTE 88-59; July
1, 1990 with respect to PTE 91-38; January 1, 1975 with respect to PTE
95-60; and July 31, 1996 with respect to PTE 96-62.

FOR FURTHER INFORMATION CONTACT: Christopher J. Motta, Office of
Exemption Determinations, Pension and Welfare Benefits Administration,
U.S. Department of Labor, (202) 693-8544, (this is not a toll-free
number); or Paul Mannina, Plan Benefits Security Division, Office of
the Solicitor, U.S. Department of Labor (202) 693-5600. (This is not a
toll-free number).

[[Page 9484]]


SUPPLEMENTARY INFORMATION: On October 29, 2001, notice was published in
the Federal Register (66 FR 54541) of the pendency before the
Department of Labor (the Department) of a proposed amendment to PTE 79-
15; PTE 80-26; PTE 80-83; PTE 81-6; PTE 81-8; PTE 82-63; PTE 83-1; PTE
84-14; PTE 88-59; PTE 91-38; PTE 95-60; and PTE 96-62. These class
exemptions provide relief from certain of the restrictions described in
section 406 of the Employee Retirement Income Security Act of 1974
(ERISA), and the taxes imposed by sections 4975(a) and (b) of the Code,
by reason of a parallel provision described in section 4975(c)(1)(A)
through (F) of the Code, provided that the conditions of the relevant
exemption have been met. The amendment to the above-described
exemptions adopted by this notice was proposed by the Department on its
own motion, pursuant to section 408(a) of ERISA and section 4975(c)(2)
of the Code and in accordance with the procedures set forth in 29 CFR
part 2570, subpart B (55 FR 32836, August 10, 1990).
    The notice gave interested persons an opportunity to submit written
comments or requests for a public hearing on the proposed amendment to
the Department. No public comments or requests for a hearing were
received.
    As noted in the proposed amendment, after consultation with the
Internal Revenue Service (the Service), the Department determined that
plans described in 4975(e)(1) of the Code are included within the scope
of relief provided by certain class exemptions issued jointly by the
Department and the Service. These exemptions are as follows:

PTE 75-1, 40 FR 50845 (1975);
PTE 77-4, 42 FR 18732 (1977);
PTE 77-7, 42 FR 31575 (1977), amended and redesignated as PTE 92-5 by
57 FR 5019 (1992);
PTE 77-8, 42 FR 31574 (1977), amended and redesignated as PTE 92-6, 57
FR 5189 (1992);
PTE 77-9, 42 FR 32395 (1977), amended and redesignated as PTE 84-24, 49
FR 13208 (1984); and
PTE 78-19, 43 FR 59915 (1978), amended and redesignated as PTE 90-1, 55
FR 2891 (1990).

    The class exemptions amended by this notice were issued pursuant to
the sole authority of the Department. These exemptions did not always
expressly define the terms ``employee benefit plan'' and ``plan'' as
used therein.\1\ The amendment adopted by this notice expressly defines
the terms ``employee benefit plan'' and ``plan'', as such terms are
found in such exemptions, to include an employee benefit plan described
in ERISA section 3(3) \2\ and/or a plan described in section 4975(e)(1)
of the Code.\3\
---------------------------------------------------------------------------

    \1\ Section 102 of the Reorganization Plan No. 4 of 1978 (5
U.S.C. App. 1 [1996]) generally transferred the authority of the
Secretary of the Treasury to issue administrative exemptions under
section 4975 of the Code to the Secretary of Labor.
    \2\ Section 3(3) of ERISA provides that the term ``employee
benefit plan'' or ``plan'' means an employee welfare benefit plan or
an employee pension benefit plan or a plan which is both an employee
welfare benefit plan and an employee pension benefit plan.
    \3\ Section 4975(e)(1) of the Code provides that, for purposes
of that Code section, the term ``plan'' means: (A) A trust described
in Code section 401(a) which forms a part of a plan, or a plan
described in Code section 403(a), which trust or plan is exempt from
tax under section 501(a); (B) an individual retirement account
described in Code section 408(a); (C) an individual retirement
annuity described in section Code 408(b); (D) an Archer MSA
described in Code section 220(d); (E) an education individual
retirement account described in Code section 530, or (f) a trust,
plan, account, or annuity which, at any time, has been determined by
the Secretary to be described in any preceding subparagraph of this
paragraph.
---------------------------------------------------------------------------

General Information

    The attention of interested persons is directed to the following:
    (1) The fact that a transaction is the subject of an exemption
under section 408(a) of ERISA and section 4975(c)(2) of the Code does
not relieve a fiduciary or other party in interest or disqualified
person from certain other provisions of ERISA and the Code, including
any prohibited transaction provisions to which the exemption does not
apply and the general fiduciary responsibility provisions of section
404 of the Act which require, among other things, that a fiduciary
discharge his duties with respect to the plan solely in the interests
of the participants and beneficiaries of the plan and in a prudent
fashion in accordance with section 404(a)(1)(B) of ERISA; nor does it
affect the requirement of section 401(a) of the Code that the plan must
operate for the exclusive benefit of the employees of the employer
maintaining the plan and their beneficiaries,
    (2) In accordance with section 408(a) of ERISA and 4975(c)(2) of
the Code, the Department makes the following determinations:
    (i) The amendment set forth herein is administratively feasible;
    (ii) The amendment set forth herein is in the interests of plans
and of their participants and beneficiaries; and
    (iii) The amendment set forth herein is protective of the rights of
participants and beneficiaries of plans,
    (3) Each exemption amended herein is applicable to a particular
transaction only if the transaction satisfies the conditions specified
in such exemption, and
    (4) The amendment is supplemental to, and not in derogation of, any
other provisions of ERISA and the Code, including statutory or
administrative exemptions and transitional rules. Furthermore, the fact
that a transaction is subject to an administrative or statutory
exemption is not dispositive of whether the transaction is in fact a
prohibited transaction.

Paperwork Reduction Act

    This proposed amendment to the class exemptions specifically
enumerated does not contain a collection of information as that term is
defined in 44 U.S.C. 3502(3), nor does it substantially or materially
modify the terms of any collection of information included in the class
exemptions that would be amended as to the definition of ``employee
benefit plan'' and ``plan'' (specifically, PTE 80-83, PTE 81-6, PTE 81-
8, PTE 82-63, PTE 88-59, PTE 91-38, and PTE 96-62). The amendment would
clarify definitions already relied upon in the analyses of these
information collections conducted in pursuant to the Paperwork
Reduction Act of 1995.

Amendment

    Under section 408(a) of ERISA and section 4975(c)(2) of the Code
and in accordance with the procedures set forth in 29 CFR part 2570,
subpart B (55 FR 32836, August 10, 1990), the Department amends the
following class exemptions as set forth below:
    1. PTE 79-15 is amended by adding the following paragraph at the
end of the exemption to read as follows: For purposes of this
exemption, the terms ``employee benefit plan'' and ``plan'' refer to an
employee benefit plan described in ERISA section 3(3) and/or a plan
described in section 4975(e)(1) of the Code.
    2. PTE 80-26 is amended by adding the following paragraph at the
end of the exemption to read as follows: For purposes of this
exemption, the terms ``employee benefit plan'' and ``plan'' refer to an
employee benefit plan described in ERISA section 3(3) and/or a plan
described in section 4975(e)(1) of the Code.
    3. PTE 80-83 is amended by adding the following paragraph 4. to
Section II. b. to read as follows: 4. For purposes of this exemption,
the terms ``employee benefit plan'' and ``plan'' refer to an employee
benefit plan described in section 3(3) of ERISA and/or a plan described
in section 4975(e)(1) of the Code.

[[Page 9485]]

    4. PTE 81-6 is amended by adding the following paragraph at the end
of the exemption to read as follows: For purposes of this exemption,
the terms ``employee benefit plan'' and ``plan'' refer to an employee
benefit plan described in ERISA section 3(3) and/or a plan described in
section 4975(e)(1) of the Code.
    5. PTE 81-8 is amended by adding the following paragraph at the end
of the exemption to read as follows: For purposes of this exemption,
the terms ``employee benefit plan'' and ``plan'' refer to an employee
benefit plan described in ERISA section 3(3) and/or a plan described in
section 4975(e)(1) of the Code.
    6. PTE 82-63 is amended by adding the following paragraph (4) to
section II. Definitions to read as follows: (4) For purposes of this
exemption, the terms ``employee benefit plan'' and ``plan'' refer to an
employee benefit plan described in ERISA section 3(3) and/or a plan
described in section 4975(e)(1) of the Code.
    7. PTE 83-1 is amended by adding the following paragraph I. to
Section III. Definitions to read as follows: I. For purposes of this
exemption, the terms ``employee benefit plan'' and ``plan'' refer to an
employee benefit plan described in ERISA section 3(3) and/or a plan
described in section 4975(e)(1) of the Code.
    8. PTE 84-14 is amended by adding the following paragraph (n) to
Part V. Definitions and General Rules to read as follows: (n) The terms
``employee benefit plan'' and ``plan'' refer to an employee benefit
plan described in section 3(3) of ERISA and/or a plan described in
section 4975(e)(1) of the Code.
    9. PTE 88-59 is amended by adding the following paragraph (F) to
Section III. Definitions to read as follows: (F) The terms ``employee
benefit plan'' and ``plan'' refer to an employee benefit plan described
in section 3(3) of ERISA and/or a plan described in section 4975(e)(1)
of the Code.
    10. PTE 91-38 is amended by adding the following paragraph (k) to
Section IV. Definitions and General Rules to read as follows: The terms
``employee benefit plan'' and ``plan'' refer to an employee benefit
plan described in section 3(3) of ERISA and/or a plan described in
section 4975(e)(1) of the Code.
    11. PTE 95-60 is amended by adding the following paragraph (j) to
Section V. Definitions to read as follows: (j) The terms ``employee
benefit plan'' and ``plan'' refer to an employee benefit plan described
in section 3(3) of ERISA and/or a plan described in section 4975(e)(1)
of the Code.
    12. PTE 96-62 is amended by adding paragraph (g) to Section IV.
Definitions to read as follows: (g) For purposes of this exemption, the
terms ``employee benefit plan'' and ``plan'' refer to an employee
benefit plan described in section 3(3) of ERISA and/or a plan described
in section 4975(e)(1) of the Code.

    Signed at Washington, DC, this 25th day of February, 2002.
Ivan L. Strasfeld,
Director, Office of Exemption Determinations, Pension and Welfare
Benefits Administration, Department of Labor.
[FR Doc. 02-4872 Filed 2-28-02; 8:45 am]
BILLING CODE 4510-29-P


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