Notice2026-11134
Proposed Exemption Involving the International Brotherhood of Electrical Workers Local Union No. 99 Joint Apprenticeship Training Committee Fund (the Fund) Located in Cranston, Rhode Island
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 3, 2026
Issuing agencies
Labor DepartmentEmployee Benefits Security Administration
Abstract
This proposed exemption would allow the Fund to purchase property from Local Union 99 Realty Corporation. Absent an exemption, the purchase would violate certain provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The purchase is expected to save the Fund approximately $45,000 per year.
Full Text
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<title>Federal Register, Volume 91 Issue 106 (Wednesday, June 3, 2026)</title>
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[Federal Register Volume 91, Number 106 (Wednesday, June 3, 2026)]
[Notices]
[Pages 33200-33205]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-11134]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
[Exemption Application No. L-12076]
Proposed Exemption Involving the International Brotherhood of
Electrical Workers Local Union No. 99 Joint Apprenticeship Training
Committee Fund (the Fund) Located in Cranston, Rhode Island
AGENCY: Employee Benefits Security Administration, Labor.
ACTION: Notice of proposed exemption.
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SUMMARY: This proposed exemption would allow the Fund to purchase
property from Local Union 99 Realty Corporation. Absent an exemption,
the purchase would violate certain provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). The purchase is
expected to save the Fund approximately $45,000 per year.
DATES:
Exemption date: If granted, this proposed exemption will be
effective as of the date of publication in the Federal Register.
Comments due: Written comments and requests for a public hearing on
the proposed exemption must be received by the Department by July 20,
2026.
ADDRESSES: All written comments and requests for a hearing must be
submitted to the Employee Benefits Security Administration (EBSA),
Office of Exemption Determinations, Attention: Application No. L-12076:
<bullet> via email to <a href="/cdn-cgi/l/email-protection#a0c58defe5e4e0c4cfcc8ec7cfd6"><span class="__cf_email__" data-cfemail="1471395b515054707b783a737b62">[email protected]</span></a>; or
<bullet> Electronically at <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the
``Submit a comment'' instructions.
Any such comments or requests must be received by the end of the
scheduled comment period. The application for exemption and the
comments received will be available for public inspection in the Public
Disclosure Room of the Employee Benefits Security Administration, U.S.
Department of Labor, Room N-1515, 200 Constitution Avenue NW,
Washington, DC 20210 1-866-444-3272. See SUPPLEMENTARY INFORMATION
below for additional information regarding comments.
[[Page 33201]]
FOR FURTHER INFORMATION CONTACT: Ms. Blessed Chuksorji-Keefe of the
Department at (202) 693-8540. (This is not a toll-free number).
SUPPLEMENTARY INFORMATION:
Comments: Persons are encouraged to submit all comments
electronically and not to follow with paper copies. Comments should
state the nature of the person's interest in the proposed exemption and
how the person would be adversely affected by the exemption, if
granted. Any person who may be adversely affected by an exemption can
request a hearing on the exemption if their request includes: (1) the
name, address, telephone number, and email address of the person making
the request; (2) the nature of the person's interest in the exemption
and the manner in which they would be adversely affected by the
exemption; and (3) a statement of the issues to be addressed and a
general description of the evidence to be presented at the hearing. The
Department will grant a request for a hearing made in accordance with
the requirements above when the Department finds that a hearing is
necessary to fully explore material factual issues identified by the
requestor, and the Department will publish a hearing notice in the
Federal Register. The Department may decline to hold a hearing if it
finds that: (1) the hearing request does not meet the requirements
stated above; (2) the only issues identified for exploration at the
hearing are matters of law; or (3) the factual issues identified can be
fully explored through the submission of evidence in written (including
electronic) form.
Warning: The Department will include all comments received in the
public record without change and will make them available online at
<a href="https://www.regulations.gov">https://www.regulations.gov</a>. The Department notes that it will include
any personal information provided in the public record and online,
unless the commenter claims any of the information included is
confidential or the disclosure of such information is restricted by
statute. If you submit a comment, EBSA recommends that you include your
name and other contact information in the body of your comment, but DO
NOT submit information that you consider to be confidential, or
otherwise protected (such as a Social Security number or an unlisted
phone number) and confidential business information that you do not
want publicly disclosed. If EBSA cannot read your comment due to
technical difficulties and cannot contact you for clarification, EBSA
might not be able to consider your comment.
Additionally, the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website is an
``anonymous access'' system, which means EBSA will not know your
identity or contact information unless you provide that information in
the body of your comment. If you send an email directly to EBSA without
going through <a href="https://www.regulations.gov">https://www.regulations.gov</a>, your email address will be
automatically captured and included as part of the comment that is
placed in the public record and made available on the internet.
Summary of Facts and Representations <SUP>1</SUP>
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\1\ The Summary of Facts and Representations is based on the
Applicant's representations and does not reflect factual findings or
opinions of the Department, unless indicated otherwise. The
Department notes that the availability of this exemption, if
granted, is subject to the express condition that the material facts
and representations made by the Applicant in Application L-12076 are
true and complete and accurately describe all material terms of the
transactions covered by the exemption. If there is any material
change in a transaction covered by the exemption, or in a material
fact or representation described in the application, the exemption
may cease to be effective, with such determination made at the
Department's sole discretion. See 29 CFR 2570.49.
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The Fund
1. The Fund, also referred to herein as the ``Applicant,'' is a
multiemployer welfare benefit plan based in Cranston, Rhode Island. The
Fund finances the International Brotherhood of Electrical Workers Local
Union No. 99 Joint Apprenticeship Training Committee (the JATC) and the
JATC Training Program. The Fund is administered by six trustees (the
Trustees): three of whom are elected by management contractors (the
Employer Trustees); and three of whom are elected by Union members (the
Union Trustees). The Fund had $4,924,206 in total assets and
approximately 800 participants as of December 31, 2024.
The Union
2. The Union is IBEW Local 99, a local chapter of the International
Brotherhood of Electrical Workers (the IBEW). Through the Fund, the
Union provides training for its members in all aspects of the
electrical industry. The Union owns and controls Local Union 99 Realty
Corporation (Realty Corp), a real estate holding company that holds
title to and operates various real estate owned by the Union.\2\
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\2\ The Department understands that Realty Corp is wholly-owned
and controlled by the Union. For the sake of simplicity when
discussing the Property, throughout this proposed exemption, the
Union is referred to as the owner of the Property.
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The Property
3. The property is a one-story metal and masonry office building
located at 40 Western Industrial Drive, Cranston, Rhode Island that is
owned by Realty Corp. (the Property).\3\ According to the Applicant, as
a lessee on the Property the Union has spent approximately $900,000 to
improve and customize the Property to meet the needs of the JATC and
the Fund. In this regard, classrooms, office space and laboratories
were installed; and fire systems, electrical facilities, computer
wiring, ceilings and floors were upgraded, to make the building
suitable for training electrical apprentices.
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\3\ Realty Corp. acquired the property for $1 million on
November 30, 2010, from G.A.M. Realty, LLC. The Applicant represents
that G.A.M. Realty, LLC is not a party in interest to the Fund and
has no connection to the Fund, the Union, or Realty Corp.
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The Leasing Arrangement
4. The Fund has leased office and classroom space on the Property
under multiple leases since 2011 and has paid a total of approximately
$1,973,461 in rent to the Realty Corp up to and including 2025.\4\
According to the Applicant, these leases were/are intended to comply in
all respects with (and be covered by) the following statutory
administrative class exemptions:
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\4\ For the years ending December 31, 2023 and December 31,
2024, the annual rental amounts paid by the Fund to the Realty Corp
were $120,099 (as of December 31, 2023) and $184,080 (as of December
31, 2024).
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<bullet> ERISA section 408(b)(2) for the lease of office space by
the Fund from the Union; and
<bullet> PTE 78-6, for the lease of classroom space by the Fund
from the Union.\5\
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\5\ See 43 FR 23024 (May 30, 1978), as corrected by 43 FR 25492
(June 13, 1978). The Department expresses no opinion as to whether
the leasing arrangement has satisfied or currently satisfies
requirements of PTE 78-6 with respect to classroom space and ERISA
section 408(b)(2) with respect to office space comprising the
Property.
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5. The Applicant represents that the Fund's use of the Property has
always been appropriate, beneficial, and critical in carrying out the
Fund's central training purposes.\6\ Further, according to the
Applicant, the prior and existing lease rental amounts and other terms
and conditions between the Union and the Fund have been reasonable and
appropriate and have been, at a minimum, as favorable to the Fund as an
arm's length lease agreement transaction between the Union and an
unrelated party would have been.
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\6\ The Applicant represents that the Union does not use any
portion of the Property for any non-Fund purposes.
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[[Page 33202]]
The Proposed Purchase
6. The Applicant seeks an exemption that would permit the Fund to
purchase the Property, which is located in Cranston, Rhode Island, from
Realty Corp, an entity that is 100% owned and controlled by the Union.
The Union is a party-in-interest with respect to the Fund.
Reasons for the Purchase
7. The Fund proposes to purchase the Property because: (a) the
Property was originally acquired by the Union for the specific purpose
of serving as a training facility; (b) since its acquisition, the
Property has received approximately $900,000 in renovations and capital
improvements, which the Fund has directly benefitted from; (c) the
Property is now a critical component of the Local #99 JATC Training
Program; and (d) the Fund has sufficient liquid assets to pay for the
down payment. In addition, the Applicant represents that the Fund's
Employer Trustees solely and unanimously approved the Purchase.
ERISA Analysis
8. Absent an exemption, the Purchase would not be permitted under
various sections of ERISA. Section 406(a)(1)(A) provides, in relevant
part, that a fiduciary with respect to a plan shall not cause the plan
to engage in a transaction, if he or she knows or should know that such
transaction constitutes a direct or indirect sale of property between a
plan and a party in interest. The term ``party in interest'' is defined
under ERISA section 3(14)(A) to include a fiduciary such as the Fund's
Trustees. Under ERISA section 3(14)(D), the term party in interest also
includes an employee organization, any of whose employees or members
are covered by such plan. Here, the Union is a party in interest with
respect to the Fund because it is an employee organization whose
members are covered by the Fund. Therefore, the Fund's Purchase of the
Property from the Union would otherwise violate ERISA section
406(a)(1)(A).
9. ERISA section 406(a)(1)(D) provides that a fiduciary shall not
cause a plan to engage in a transaction if he knows or should know that
such transaction constitutes a transfer to, or use by or for the
benefit of, a party in interest, of any assets of the plan. Here, the
Fund's transfer of cash to the Union in exchange for the Property would
otherwise violate ERISA section 406(a)(1)(D).
10. ERISA section 406(b)(1) prohibits a plan fiduciary from dealing
with a plan's assets ``. . . in his own interest or for his own
account.'' ERISA section 406(b)(2) prohibits a plan fiduciary ``in his
individual or in any other capacity [from acting] in any transaction
involving the plan on behalf of a party (or represent a party) whose
interests are adverse to the interests of the plan or the interests of
its participants or beneficiaries.'' \7\
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\7\ The Applicant states that the Union Trustees recused
themselves from all matters relating to the transaction. However,
the Department cannot opine as to whether the Union Trustees
effectively recused themselves from all aspects of the Purchase so
as to negate a violation of ERISA section 406(b)(1) and 406(b)(2),
because that determination is inherently factual. This exemption
would not extend relief to the Purchase to the extent the Union
Trustees did, in fact, exercise any fiduciary authority or
discretion to cause the Fund to engage in the Purchase in order to
benefit themselves or their own interests.
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Terms of the Purchase Required by the Exemption
11. The Purchase will be a one-time transaction for cash. An
independent fiduciary (the Independent Fiduciary) who must be prudently
hired by the Fund's Employer Trustees, will represent the interests of
the Fund and its participants and beneficiaries for all purposes with
respect to the Purchase. The Independent Fiduciary will review and
approve the terms and conditions of the Purchase on behalf of the Fund
and determine whether it is prudent for the Fund to proceed with the
Purchase. The Independent Fiduciary will also determine in writing that
the Purchase and any related terms and conditions are in the interest
of, and protective of, the Fund and its participants and beneficiaries.
The Independent Fiduciary will review the Appraisal Report (discussed
below), confirm that the underlying methodology is reasonable and
accurate, confirm that the valuation of the Property was reasonably
derived, and ensure that the Independent Appraiser (discussed below)
renders an updated fair market valuation of the Property as of the date
of the Purchase. In the event the Fund finances the Purchase, it will
do so with an unrelated, third-party bank and on terms that the
Independent Fiduciary determines in writing are prudent and in the
interest of, and protective of the rights of, the Fund.
The Independent Fiduciary
12. The Applicant states that Gallagher Fiduciary Advisors, LLC
(Gallagher) will act as the Independent Fiduciary and represent the
Fund with respect to the Purchase. Gallagher, along with its
predecessor firm, has been carrying out independent fiduciary decision-
making assignments for ERISA-covered plans since 1989 and represents
that it has no relationship with either the Fund or the Union, except
for its role as the Fund's Independent Fiduciary with respect to the
Purchase. Gallagher represents that the fee for its services as
Independent Fiduciary for the Fund will be less than 1% of its annual
revenues for its prior income tax year.
The Independent Appraiser
13. Peter M. Scotti & Associates of Providence, Rhode Island
(Scotti) was retained by the Employer Trustees to serve as the
Independent Appraiser with respect to the valuation of the Property.
Scotti represents that it has no relationship with any party in
interest with respect to the Fund, the Union or Realty Corp. Scotti
further represents that the percentage of projected revenues for the
current federal income tax year (including amounts received from
preparing the appraisal report) that it will derive from parties in
interest to the Fund represents less than 1% of the appraiser's revenue
from the prior federal income tax year.
14. R. Peter Tache, a Scotti staff appraiser, inspected the
Property on February 7, 2019, and again on or about September 29, 2022.
Mr. Tache states that he has no present or contemplated future interest
in the Property nor any personal interest or bias with respect to the
parties involved in the Purchase.
15. Mr. Tache produced an Appraisal Report dated October 3, 2019,
which he subsequently updated on October 7, 2022 (with an effective
date of September 29, 2022) (referred to collectively as the Appraisal
Report).\8\ Mr. Tache determined that the fair market value of the
Property was $1,610,000 as of September 29, 2022 and will update the
Appraisal Report on the date of the closing of the Purchase, if the
proposed exemption is granted.
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\8\ The Independent Fiduciary requested that Scotti perform an
updated Appraisal of the Property as of September/October, 2022.
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The Independent Fiduciary Analysis
16. The Independent Fiduciary represents that the proposed
transaction is in the best interests of the Fund because: (a) the Fund
will save approximately $45,000 per year in expenses related to the
Property; \9\ (b)
[[Page 33203]]
the JATC and the Fund have historically operated the JATC's Training
Program at the Property, which is centrally located for students and
journeymen, with customized classroom and training space that is
sufficient for current and future needs; and (c) the Fund will not
reimburse or otherwise pay the Union for the cost of the improvements
($900,000) that the Union made to make the Property suitable for the
Training Program. Furthermore, the Independent Fiduciary represents
that there are no alternative suitable properties available for the
Fund to purchase or lease in the area.
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\9\ In its report dated October 28, 2024, the Independent
Fiduciary compared the current expenses prior to the Purchase and
the projected expenses after the Purchase and determined a
``Decrease in Total Expense'' after the Purchase of $45,000 per year
on average. The Independent Fiduciary considered: the amount of
building expenses that were paid at the Realty Corp. level; in the
event that purchase is financed, projected debt service payments of
$57,954 per year, which is based on a twenty-year loan with monthly
payments calculated at the current 6.58% interest rate; and $10,000
per year allocated to a ``Repair and Replacement Reserve,'' which is
roughly equivalent to the scheduled repairs estimated to be
required. Notwithstanding the above, the Independent Fiduciary will
make any determination required by this exemption based on the most
current information and assumptions available.
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17. The Independent Fiduciary considered whether, in lieu of
purchasing the Property, the Fund could continue leasing the Property.
In this regard, the Independent Fiduciary reviewed the Appraisal Report
for the Property, analyzed commercial listings for properties available
for lease and their suitability for the Fund, and held conversations
with commercial real estate brokers regarding potential leasing
options. Based on this research and other data, the Independent
Fiduciary determined that there were no comparable properties available
for lease with similar benefits and location as the Property.
18. The Independent Fiduciary states that due diligence studies
prepared for the Fund show that the Property is in good condition, has
no environmental conditions, and is zoned properly for use as a
training school. Further, the Independent Fiduciary states that the
Fund can afford to purchase the Property while retaining reserves that
are more than sufficient to support the operation of the Fund's
programs.
19. The Independent Fiduciary notes that the Purchase Agreement
requires the Union to pay all closing costs, fees, policy premiums, and
taxes including legal fees related to the Purchase, whereas in Rhode
Island, closing costs in arm's length transactions are customarily
split between the seller and buyer. Therefore, the Independent
Fiduciary notes that the Purchase will save the Fund approximately
$52,500 \10\ in expenses as opposed to purchasing a similarly priced
property from a third party.
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\10\ The Independent Fiduciary estimates that the closing costs
for the transfer of the Property, which are typically shared between
the buyer and seller, would total $105,000. These expenses are
hypothetical and are only used as an example of what the expenses
could be if closing costs were paid. According to the Independent
Fiduciary, these expenses include an estimated brokerage fee of
$84,600; Rhode Island Real Estate Conveyance Tax ($4.60 per $1000
until September 30, 2025, and increased to $7.50 per $1000 on
October 1, 2025); and certain additional closing costs which will be
paid by the Fund alone which include lending fees of between .50%
and .75%, lender legal fees at $3,500, and the additional cost of an
appraisal. The Independent Fiduciary will make any determination
required by this exemption based on the most current information and
assumptions available.
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20. The Independent Fiduciary represents that that the Fund's net
assets following the Purchase should be approximately $3,643,000, which
represents almost five years of operating expenses on hand for the Fund
that is well above the six-month standard.\11\ The Independent
Fiduciary represents that it will review any loan commitments and
proposals provided to the Fund to finance the Purchase to ensure that
such financing supports the Purchase and does not include any terms
which will handicap the Fund's ability to support its training mission.
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\11\ The Independent Fiduciary states that every training fund
should have 6 months of operating expenses on hand.
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21. The Independent Fiduciary represents that its ultimate approval
of the Purchase will be subject to the following post-exemption
caveats: (a) a review and agreement on the terms of a final agreement
for the Purchase; (b) a redetermination of the market value of the
Property as of the date of the Purchase; and (c) the Independent
Fiduciary's satisfaction that all conditions to closing, as set forth
in the Purchase Agreement and related instruments have been satisfied.
Other Conditions of the Proposed Exemption Include <SUP>12</SUP>
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\12\ This summary does not describe all the conditions set forth
in the proposed exemption. To see all the conditions applicable to
the Purchase, please see the Proposed Exemption section below.
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22. The Fund will not incur any fees, costs, commissions, or other
expenses as a result of the Purchase, other than the necessary and
reasonable fees that will be paid to the Independent Appraiser, or any
other party in interest. In the event the Fund finances the Purchase,
it must do so with an unrelated, third-party bank and on terms that the
Independent Fiduciary determines in writing are prudent and in the
interest of, and protective of the rights of, the Fund. The terms and
conditions of the Purchase must be no less favorable to the Fund than
the terms the Fund would receive under similar circumstances in an
arm's length transaction with an unrelated party, and the Purchase must
not be part of an agreement, arrangement or understanding designed to
benefit the Union. The parties are subject to record maintenance
conditions and are required to provide the Department with records
necessary to demonstrate that the conditions of this exemption have
been met, within 30 days from the date the Department requests such
records. Finally, all the material facts and representations set forth
in the Summary of Facts and Representations must be true and accurate
at all times.
The Department's Statutory Findings
23. Administratively Feasible. The Department has tentatively
determined that the proposed exemption is administratively feasible
because the Purchase will be a one-time transaction for cash overseen
by an Independent Fiduciary that is prudently selected by the
disinterested Employer Trustees.
24. In the Interest of the Fund and its Participants and
Beneficiaries. The Department has tentatively determined that proposed
exemption is in the interest of the Fund and its participants and
beneficiaries because: the Fund will save at least approximately
$45,000 per year in operating expenses from the Purchase; the Fund will
be able to realize the benefits of real estate appreciation from
ownership over time (as well as avoiding increases in rent from such
appreciation); and the Union will pay all closing costs in connection
with the Purchase.
25. Protective of the Rights of the Participants and Beneficiaries.
The Department has tentatively determined that the proposed exemption
is protective of the rights of the Fund and its participants and
beneficiaries because, among other things, the Independent Fiduciary
must approve the terms and conditions of the Purchase on behalf of the
Fund and take any action required to enforce the rights of the Fund.
Notice to Interested Persons
Notice of the proposed exemption (the Notice) will be given to
interested persons, which include Union members and Fund participants
and beneficiaries, within fifteen (15) calendar days of the date of
publication of the Notice in the Federal Register. The Notice will be
provided to interested persons by first class mail, with postage
prepaid. In addition, a copy of the notice will be posted on the
bulletin board in the Union Hall. Such Notice will contain a copy of
the proposed exemption, as published in the Federal Register and a
supplemental statement, as required
[[Page 33204]]
pursuant to 29 CFR 2570.43(a)(2). The supplemental statement will
inform interested persons of their right to comment on and/or request a
hearing with respect to the pending exemption. The Department will not
consider comments and requests for a hearing received by the Department
after forty-five (45) calendar days from the date of the publication of
the Notice in the Federal Register. All comments will be made available
to the public.
Warning: Do not include any personally identifiable information
(such as name, address, or other contact information) or confidential
business information that you do not want publicly disclosed. All
comments become part of the disclosable administrative record. Further,
comments may be posted on the internet and can be retrieved by most
internet search engines.
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 ERISA section 408(a) does not relieve a fiduciary or other party
in interest from certain other provisions of ERISA, 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 their
duties respecting the plan solely in the interest of the participants
and beneficiaries of the plan and in a prudent manner in accordance
with ERISA section 404(a)(1)(b);
(2) Before an exemption may be granted under ERISA section 408(a),
the Department must find that the exemption is administratively
feasible, in the interests of the plan and of its participants and
beneficiaries, and protective of the rights of participants and
beneficiaries of the plan;
(3) The proposed exemption, if granted, will be supplemental to,
and not in derogation of, any other provisions of ERISA, 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; and
(4) The proposed exemption, if granted, would be subject to the
express condition that the material facts and representations contained
in the application are true and complete at all times, and that the
application accurately describes all material terms of the transactions
which are the subject of the exemption.
Proposed Exemption
The Department is considering granting an exemption under the
authority of ERISA section 408(a), and in accordance with the
Department's exemption procedures regulation set forth in 29 CFR part
2570, subpart B (76 FR 66637, 66644, October 27, 2011). If the proposed
exemption is granted, the restrictions of ERISA sections 406(a)(1)(A),
406(a)(1)(D), 406(b)(1), and 406(b)(2) will not apply to the Fund's
purchase (the Purchase) of improved real property (the Property),
located at 40 Western Industrial Drive, in Cranston, Rhode Island, from
Local Union 99 Realty Corporation (Realty Corp), an entity that is 100%
owned and controlled by IBEW Local 99 (the Union), a party in interest
with respect to the Fund, provided:
(a) The Purchase is a one-time transaction for cash. In the event
the Fund finances the Purchase, it will do so with an unrelated, third-
party bank and on terms that a prudently-appointed independent
fiduciary (the Independent Fiduciary) determines in writing are prudent
and in the interest of, and protective of the rights of, the Fund;
(b) The Fund pays the lesser of either: (1) $1,610,000; or (2) the
fair market value of the Property as established by a qualified
independent appraiser (the Independent Appraiser) in an appraisal
report of the Property that is updated on the date of the Purchase;
(c) The terms and conditions of the Purchase are no less favorable
to the Fund than the terms the Fund would receive under similar
circumstances in an arm's length transaction with an unrelated party;
(d) The Fund pays no fees, costs, commissions, or other expenses,
other than necessary and reasonable fees, to any party in interest in
connection with the Purchase;
(e) The Purchase is not part of an agreement, arrangement or
understanding designed to benefit the Union;
(f) The Independent Appraiser must not have entered into, and must
not enter into, any agreement, arrangement, or understanding that
includes any provision that provides for the direct or indirect
indemnification or reimbursement of the Independent Appraiser by the
Fund or any other party for any failure to adhere to its contractual
obligations or to state or Federal laws applicable to the Independent
Appraiser's work; or waives any rights, claims or remedies of the Plan
or its participants and beneficiaries under ERISA, the Code, or other
Federal and state laws against the Independent Appraiser with respect
to the Purchase;
(g) A qualified independent fiduciary (the Independent Fiduciary),
prudently hired by the Fund's Board of Trustees:
(1) Represents the Fund's interests for all purposes with respect
to the Purchase;
(2) Determines in writing that the Purchase is in the interest of,
and protective of, the Fund and the participants of the Fund, based on
the most current information and assumptions;
(3) Reviews and approves the terms and conditions of the Purchase
and any related transactions and takes any action necessary to enforce
the rights of the Fund in connection with such transactions;
(4) Reviews the Independent Appraisal Report, confirms that the
underlying methodology is reasonable and accurate, and confirms that
the valuation of the Property was reasonably derived;
(5) Ensures that the Independent Appraiser renders an updated fair
market valuation of the Property as of the date of the Purchase;
(6) Determines in writing whether it is prudent for the Fund to
proceed with the Purchase, based on the most current information and
assumptions;
(7) Prepares a final report certifying that every condition in the
exemption has been met with a description of any steps taken or
information verified in order to make such certifications. The report
will be delivered to the Department at <a href="/cdn-cgi/l/email-protection#0f6a22404a4b4f6b606321686079"><span class="__cf_email__" data-cfemail="ceabe3818b8a8eaaa1a2e0a9a1b8">[email protected]</span></a> within 60 days of
the date of closing of the Purchase.
(8) Has not entered into and must not enter into any agreement,
arrangement, or understanding that includes any provision that provides
for the direct or indirect indemnification or reimbursement of the
Independent Fiduciary by the Fund or other party for any failure to
adhere to its contractual obligations or to state or Federal laws
applicable to the Independent Fiduciary's work; or waives any rights,
claims, or remedies of the Fund under ERISA, state, or Federal law
against the Independent Fiduciary with respect to the transaction(s)
that are the subject of the exemption; and
(9) Must not enter into any agreement or instrument in connection
with its appointment as Independent Fiduciary that violates section 410
of ERISA or section 2509.75-4 of the Department's regulations;
(h) The Fund's Board of Trustees and the Independent Fiduciary
maintain for
[[Page 33205]]
a period of six (6) years from the date of the Purchase, in a manner
that is convenient and accessible for audit and examination, the
records necessary to enable the persons described in paragraph (i)(1)
below to determine whether conditions of this exemption have been met,
except that (i) a prohibited transaction will not be considered to have
occurred if, due to circumstances beyond the control of the Fund's
Board of Trustees and/or the Independent Fiduciary, the records are
lost or destroyed prior to the end of the six-year period, and (ii) no
party in interest other than the Fund's Board of Trustees or the
Independent Fiduciary shall be subject to the civil penalty that may be
assessed under ERISA section 502(i) if the records are not maintained,
or are not available for examination as required by paragraph (i)
below; and
(i)(1) Except as provided in section (2) of this paragraph and not
withstanding any provisions of subsections (a)(2) and (b) of ERISA
section 504, the records referred to in paragraph (h) above shall be
unconditionally available at their customary location during normal
business hours to:
(i) any duly authorized employee or representative of the
Department or the Internal Revenue Service;
(ii) the Fund's Board of Trustees or any duly authorized
representative of the Fund's Board of Trustees;
(iii) the Independent Fiduciary or any duly authorized
representative of the Independent Fiduciary;
(iv) any participant or beneficiary of the Plan, or any duly
authorized representative of such participant or beneficiary;
(2) Should any party refuse to disclose information to a person on
the basis that such information is exempt from disclosure; such party
shall by the close of the thirtieth (30th) day following the request,
provide a written notice advising that person of the reasons for the
refusal and that the Department may request such information;
(j) The Union, the Fund's Board of Trustees, and/or the Independent
Fiduciary must provide to the Department the records necessary to
demonstrate that the conditions of this exemption, as amended, have
been met, within 30 days from the date the Department requests such
records; and
(k) All the material facts and representations set forth in the
Summary of Facts and Representations are true and accurate at all
times.
Exemption Date: The exemption will be in effect as of the date the
final exemption is published in the Federal Register.
Signed at Washington, DC, this 1st day of June 2026.
Christopher Motta,
Acting Director, Office of Exemption Determinations, Employee Benefits
Security Administration, U.S. Department of Labor.
[FR Doc. 2026-11134 Filed 6-2-26; 8:45 am]
BILLING CODE 4510-29-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on June 3, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.