DOL/EBSA Amend Exemptions Permitting Certain Plan Transactions

February 3, 2006 – The U.S. Department of Labor’s Employee Benefit Security Administration (EBSA) has posted a news release summarizing amendments to two prohibited transaction class exemptions, and has published the amendments. According to EBSA’s news release, plans will be allowed to engage in certain transactions with a greater number of financial institutions and insurers if certain conditions are met. This is made possible by amendments to Prohibited Transaction Exemption (PTE) 75-1 and PTE 84-24. 

Under amended PTE 75-1, according to the news release, a plan will be allowed to engage in certain transactions with broker-dealers, reporting dealers and banks that are plan fiduciaries, as long as they and their affiliates do not have investment authority over, or provide investment advice with respect to, plan assets involved in a given transaction.

Under amended PTE 84-24, according to the release, similar relief is granted to insurance agents and brokers, retirement plan consultants, and mutual fund principal underwriters to engage in investment transactions and receive related commissions for transactions that involve the sale of insurance and mutual fund products. The EBSA news release and PTE amendments (published in the Federal Register) are available via the following links. They will not be distributed, but will be reviewed for their relevance to BISYS associates and clients.

The EBSA release and amendments may be found as follows.