Notice2021-13680
Exemption From Certain Prohibited Transaction Restrictions Involving the Electrical Insurance Trustees Insurance Fund and the Electrical Joint Apprenticeship and Training Trust (the Plans or the Applicants) Located in Alsip, Illinois
Primary source
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Published
June 28, 2021
Issuing agencies
Labor DepartmentEmployee Benefits Security Administration
Abstract
This document contains a notice of an exemption issued by the Department of Labor (the Department) from certain of the prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974 (ERISA or the Act). The exemption permits: (a) The sale (the Sale) by the Electrical Joint Apprenticeship and Training Trust (the EJAT Trust) of 5.11 acres of unimproved real property (the Property) to the Electrical Insurance Trustees Insurance Fund (the EIT Fund), a party in interest with respect to the EJAT Trust; and (b) the EIT Fund's granting of a right of first offer (the Right of First Offer) to the EJAT Trust to purchase the Property back from the EIT Fund, provided all of the conditions described below are satisfied.
Full Text
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<title>Federal Register, Volume 86 Issue 121 (Monday, June 28, 2021)</title>
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[Federal Register Volume 86, Number 121 (Monday, June 28, 2021)]
[Notices]
[Pages 34054-34056]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-13680]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
[Prohibited Transaction Exemption 2021-03; Exemption Application Nos.
L-12000 & L-12001]
Exemption From Certain Prohibited Transaction Restrictions
Involving the Electrical Insurance Trustees Insurance Fund and the
Electrical Joint Apprenticeship and Training Trust (the Plans or the
Applicants) Located in Alsip, Illinois
AGENCY: Employee Benefits Security Administration, Labor.
ACTION: Notice of Exemption.
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SUMMARY: This document contains a notice of an exemption issued by the
Department of Labor (the Department) from certain of the prohibited
transaction restrictions of the Employee Retirement Income Security Act
of 1974 (ERISA or the Act). The exemption permits: (a) The sale (the
Sale) by the Electrical Joint Apprenticeship and Training Trust (the
EJAT Trust) of 5.11 acres of unimproved real property (the Property) to
the Electrical Insurance Trustees Insurance Fund (the EIT Fund), a
party in interest with respect to the EJAT Trust; and (b) the EIT
Fund's granting of a right of first offer (the Right of First Offer) to
the EJAT Trust to purchase the Property back from the EIT Fund,
provided all of the conditions described below are satisfied.
DATES: This exemption will be in effect on the date that this grant
notice is published in the Federal Register.
FOR FURTHER INFORMATION CONTACT: Mr. Joseph Brennan of the Department
at (202) 693-8456. (This is not a toll-free number.)
SUPPLEMENTARY INFORMATION: On March 22, 2021, the Department published
a notice of proposed exemption in the Federal Register at 86 FR 15258,
permitting: (a) The Sale by the EJAT Trust of the Property to the EIT
Fund, a party in interest with respect to the EJAT Trust; and (b) the
EIT Fund's granting of the Right of First Offer to the EJAT Trust to
purchase the Property back from the EIT Fund.
This exemption provides only the relief specified in the text of
the exemption. It provides no relief from violations of any law other
than the prohibited transaction provisions of ERISA.
The Department makes the requisite findings under ERISA section
408(a) based on adherence to all of the conditions of the exemption.
Accordingly, affected parties should be aware that the conditions
incorporated in this exemption are, taken as a whole, necessary for the
Department to grant the relief requested by the Applicants. Absent
these or similar conditions, the Department would not have granted this
exemption.
The Applicants requested an individual exemption pursuant to ERISA
section 408(a) in accordance with the procedures set forth in 29 CFR
part 2570, subpart B (76 FR 66637, 66644, October 27, 2011). Effective
December 31, 1978, section 102 of the Reorganization Plan No. 4 of
1978, 5 U.S.C. App. 1 (1996), transferred the authority of the
Secretary of the Treasury to issue administrative exemptions under
section 4975(c)(2) of the Code to the Secretary of Labor. Accordingly,
the Department grants this exemption under its sole authority.
Written Comments
In the proposed exemption, the Department invited all interested
persons to submit written comments and/or requests for a public hearing
with respect to the notice of proposed exemption. All comments and
requests for a hearing were due to the Department by May 6, 2021. The
Department received one written comment and one request for a public
hearing. The commenter raised no substantive issues regarding the
proposed transactions, and the hearing requestor provided no reasons
for requesting the hearing.\1\ Accordingly, after considering the
entire record developed in connection with the Applicants' exemption
requests, the Department has determined to grant the exemption
described below. The exemption contains minor clarifications to the
proposal.
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\1\ The Department made several attempts to contact the
requestor for further information. However, no response was
received.
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The complete application files (L-12000 & L-12001) are available
for public inspection in the Public Disclosure Room of the Employee
Benefits Security Administration, Room N-1515, U.S. Department of
Labor, 200 Constitution Avenue NW, Washington, DC 20210. For a more
complete statement of the facts and representations supporting the
Department's decision to grant this exemption, refer to the notice of
proposed exemption published on March 22, 2021, at 86 FR 15258.
General Information
The attention of interested persons is directed to the following:
[[Page 34055]]
(1) The fact that a transaction is the subject of an exemption
under ERISA section 408(a) does not relieve a fiduciary or other party
in interest from certain requirements of other ERISA provisions,
including any prohibited transaction provisions to which the exemption
does not apply and the general fiduciary responsibility provisions of
ERISA section 404, which, among other things, require a fiduciary to
discharge his or her duties respecting the plan solely in the interest
of the plan's participants and beneficiaries and in a prudent fashion
in accordance with ERISA section 404(a)(1)(B).
(2) As required by ERISA section 408(a), the Department hereby
finds that the exemption is (1) administratively feasible, (2) in the
interests of affected plans and of their participants and
beneficiaries, and (3) protective of the rights of participants and
beneficiaries of such plans;
(3) The exemption is supplemental to, and not in derogation of, any
other ERISA provisions, 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 determining whether the transaction is in fact a
prohibited transaction; and
(4) The availability of this exemption is subject to the express
condition that the material facts and representations contained in the
application accurately describe all material terms of the transaction
that are the subject of the exemption.
Accordingly, the following exemption is granted under the authority
of ERISA section 408(a)and in accordance with the procedures set forth
in 29 CFR part 2570, subpart B (76 FR 66637, 66644, October 27, 2011):
Exemption
Section I. Covered Transactions
The restrictions of ERISA sections 406(a)(1)(A), 406(a)(1)(D),
406(b)(1), and 406(b)(2) shall not apply to: (a) EJAT Trust's sale of
the Property to the EIT Fund, which is a party in interest with respect
to the EJAT Trust; \2\ and (b) the EIT Fund's grant of the Right of
First Offer to the EJAT Trust to purchase the Property back from the
EIT Fund, provided conditions set forth in (a) through (l) below are
satisfied:
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\2\ The EIT Fund is a party in interest with respect to the EJAT
Trust under section 3(14)(C) of the Act because it is an employer
whose employees participate in the EJAT Fund.
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(a) The Sale is a one-time transaction for cash;
(b) The terms and conditions of the Sale are at least as favorable
to the EJAT Trust and the EIT Fund as an arm's-length transaction
between unrelated and independent parties each of whom have full
knowledge of the relevant facts and are not under any compulsion to buy
or sell;
(c) The EJAT Trust Independent Fiduciary has not and will not enter
into any agreement or instrument that violates section 410 of ERISA,
and prudently:
(1) Represents the EJAT Trust's interests for all purposes with
respect to the Sale;
(2) Determines that the Sale is in the interest and protective of
the EJAT Trust and the EJAT Trust participants based on, among other
things, an updated appraisal report described in (c)(5) below;
(3) Reviews and approves the terms and conditions of the Sale;
(4) Engages the EJAT Trust Independent Appraiser, ensures the
Appraiser's independence, and ensures that the Appraiser bases its
opinions upon complete, current, and accurate information;
(5) Ensures that the EJAT Trust's Independent Appraiser renders an
updated fair market valuation of the Property, which is current as of
the date of the Sale;
(6) Reviews the EJAT Independent Appraisal Report and the updated
appraisal described in (c)(5), confirms that the underlying
methodologies are reasonable and accurate, and prudently concludes that
the appraisals can reasonably be relied upon; and
(7) Determines whether it is appropriate for the EJAT Trust to
proceed with the Sale and whether the Sale is consistent with each
condition of this exemption;
(d) The EIT Fund Independent Fiduciary has not and will not enter
into any agreement or instrument that violates section 410 of ERISA,
and prudently:
(1) Represents the EIT Fund's interests for all purposes with
respect to the Sale;
(2) Determines that the Sale is in the interest and protective of
the EIT Fund and the EIT Fund participants based on, among other
things, an updated appraisal report described in (d)(5) below;
(3) Reviews and approves the terms and conditions of the Sale;
(4) Engages the EIT Fund Independent Appraiser for the Sale,
ensures the Appraiser's Independence, and ensures that the Appraiser
bases its opinions upon complete, current, and accurate information;
(5) Ensures that the EIT Fund's Independent Appraiser renders an
updated fair market valuation of the Property, which is current as of
the date of the Sale;
(6) Reviews the EIT Fund Independent Appraisal Report and the
updated appraisal described in (d)(5), confirms that the underlying
methodologies are reasonable and accurate, and prudently concludes that
the appraisals can reasonably be relied upon; and
(7) Determines whether it is appropriate for the EIT Fund to
proceed with the Sale consistent with each condition of this exemption;
(e) The Sale is not part of an agreement, arrangement, or
understanding designed to benefit any party other than the EJAT Trust
and the EIT Fund;
(f) Any use of the Property by the EIT Fund and the Related Plans
that is described in PTEs 76-1 and 77-10 complies with the conditions
of those exemptions;
(g) No later than 90 days after the Sale is completed, the EJAT
Trust and the EIT Fund Independent Fiduciaries each will submit a
written statement to the Department documenting that the Sale has met
all of the exemption requirements;
(h) The EIT Fund Independent Fiduciary may not enter, and has not
entered, into any agreement, arrangement or understanding regarding the
Sale that indemnifies the EIT Fund Independent Fiduciary, in whole or
in part, or waives any liability for negligence or for violation of
state or federal law by the EIT Fund Independent Fiduciary;
(i) The Independent Appraiser selected by the EIT Fund Independent
Fiduciary may not enter, and has not entered, into any agreement,
arrangement or understanding regarding the Sale that indemnifies the
EIT Fund Independent Appraiser, in whole or in part, or waives any
liability for negligence or for any violation of state or federal law
by the Independent Appraiser;
(j) The EJAT Trust Independent Fiduciary may not enter, and has not
entered, into any agreement, arrangement or understanding regarding the
Sale that indemnifies the EJAT Trust Independent Fiduciary, in whole or
in part, or waives any liability for negligence or for any violation of
state or federal law by the EJAT Trust Independent Fiduciary;
(k) The Independent Appraiser selected by the EJAT Trust
Independent Fiduciary may not enter, and has not entered, into any
agreement,
[[Page 34056]]
arrangement or understanding regarding the Sale that indemnifies the
Independent Appraiser, in whole or in part, for negligence or for any
violation of state or federal law by the Independent Appraiser; and
(l) The EJAT Trust may not re-purchase the Property from the EIT
Fund absent an individual exemption granted by the Department.
Effective Date: This exemption will become effective on the date
that this grant notice is published in the Federal Register.
Signed at Washington, DC, this 22nd day of June, 2021.
Christopher Motta,
Chief, Division of Individual Exemptions, Office of Exemption
Determinations, Employee Benefits Security Administration, U.S.
Department of Labor.
[FR Doc. 2021-13680 Filed 6-25-21; 8:45 am]
BILLING CODE 4510-29-P
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</html>Indexed from Federal Register on June 28, 2021.
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