Exemption for Certain Prohibited Transactions Involving the International Brotherhood of Electrical Workers Local Union No. 99 Joint Apprenticeship Training Fund (the Fund or the Applicant) Located in Cranston, Rhode Island

Issuing agencies

Abstract

This exemption permits the International Brotherhood of Electrical Workers Local Union No. 99 Joint Apprenticeship Training Fund (the Fund) to purchase certain improved real property located at 40 Western Industrial Drive, Cranston, Rhode Island (the Property) 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. Absent an exemption, this transaction would violate the prohibited transaction provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

Full Text

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<title>Federal Register, Volume 91 Issue 200 (Monday, October 19, 2026)</title>
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[Federal Register Volume 91, Number 200 (Monday, October 19, 2026)]
[Notices]
[Pages 66164-66166]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-21277]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration

[Prohibited Transaction Exemption 2026-09; Application Number L-12076]


Exemption for Certain Prohibited Transactions Involving the 
International Brotherhood of Electrical Workers Local Union No. 99 
Joint Apprenticeship Training Fund (the Fund or the Applicant) Located 
in Cranston, Rhode Island

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Notice of exemption.

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SUMMARY: This exemption permits the International Brotherhood of 
Electrical Workers Local Union No. 99 Joint Apprenticeship Training 
Fund (the Fund) to purchase certain improved real property located at 
40 Western Industrial Drive, Cranston, Rhode Island (the Property) 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. Absent an exemption, this transaction would 
violate the prohibited transaction provisions of the Employee 
Retirement Income Security Act of 1974 (ERISA).

DATES: Exemption date: This final exemption will be in effect as of 
October 19, 2026.

FOR FURTHER INFORMATION CONTACT: Ms. Blessed Chuksorji-Keefe, Office of 
Exemption Determinations, Employee Benefits Security Administration, 
U.S. Department of Labor, at <a href="/cdn-cgi/l/email-protection#62210a1709110d10080b4c200e071111070622060d0e4c050d14"><span class="__cf_email__" data-cfemail="3d7e5548564e524f5754137f51584e4e58597d595251135a524b">[email&#160;protected]</span></a>.

SUPPLEMENTARY INFORMATION: 
    Background: On June 3, 2026, the Department published a notice of 
proposed exemption in the Federal Register at 91 FR 33200 (Proposed 
Exemption). The Proposed Exemption involves the Fund's purchase of the 
Property from the Union in exchange for a cash payment equal to the 
lesser of $1,610,000 or the appraised fair market value of the Property 
updated on the date of the sale. The Fund has leased the Property since 
2011 for use by the Local #99 Joint Apprenticeship Training Committee 
(JATC) Training Program.
    Benefits of the Exemption: The Department is granting relief based, 
in part, on the Applicant's representations that the Fund will: (1) 
save approximately $45,000 per year in operating expenses as a result 
of the Purchase; (2) not be required to reimburse the Union for the 
approximately $900,000 in improvements the Union made to the Property 
to make it suitable for the JATC Training Program; and (3) not pay any 
closing costs in connection with the purchase, which could total as 
much as $52,500.
    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 Proposed Exemption. All comments and 
requests for a hearing were due to the Department by July 20, 2026. The 
Department did not receive any written comments or requests for a 
public hearing with respect to the Proposed Exemption.\1\
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    \1\ All information submitted by the Applicant to the Department 
in connection with this exemption is available through the 
Department's Public Disclosure Room, by referencing L-12076.
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    Based on the record, the Department has determined to grant the 
Proposed Exemption. In order to clarify the operative text, the 
Department has added a ``Definitions'' section and made several non-
substantive edits. This exemption provides only the relief specified 
herein and does not provide 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) that the 
exemption is: (1) administratively feasible for the Department, (2) in 
the interest of the Fund and its participants and beneficiaries, and 
(3) protective of the rights of the participants and beneficiaries of 
the Fund, based on the Applicant's adherence to all the conditions and 
definitions of the exemption at all times. Accordingly, affected 
parties should be aware that the conditions and definitions 
incorporated in this exemption are, taken individually and as a whole, 
necessary for the Department to grant the relief requested by the 
Applicant.
    The complete application file (L-12076) is 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, reachable by telephone at 
1-866-444-3272. For a more complete statement of the facts and 
representations supporting the Department's decision to grant this 
exemption, please refer to the Proposed Exemption.

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 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 for the 
Department, (2) in the interests of the Fund and its participants and 
beneficiaries, and (3) protective of the rights of participants and 
beneficiaries of the Fund;
    (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

[[Page 66165]]

contained in the application accurately describe all material terms of 
the transactions that are the subject of the exemption and are true at 
all times.
    Accordingly, after considering the entire record developed in 
connection with the Applicant's exemption application, the Department 
has determined to grant the following exemption under the authority of 
ERISA section 408(a) in accordance with the Department's exemption 
procedures regulation set forth in 29 CFR part 2570, subpart B.\2\
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    \2\ The procedures governing the Applicant's exemption request 
are found at 29 CFR part 2570, subpart B (76 FR 66637, 66644, Oct. 
27, 2011).
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Exemption

Section I. Definitions

    (a) ``Fund'' or ``Applicant'' means the International Brotherhood 
of Electrical Workers Local Union No. 99 Joint Apprenticeship Training 
Fund.
    (b) ``Union'' means IBEW Local 99, a local chapter of the 
International Brotherhood of Electrical Workers.
    (c) ``Realty Corp'' means Local Union 99 Realty Corporation, an 
entity 100% owned and controlled by the Union.
    (d) ``Property'' means the one-story metal and masonry office 
building located at 40 Western Industrial Drive, Cranston, Rhode 
Island.
    (e) ``Independent Fiduciary'' means Gallagher Fiduciary Advisors, 
LLC, the entity prudently appointed by the Fund's Board of Trustees to 
act as the independent fiduciary on behalf of the Fund in connection 
with the exemption.
    (f) ``Independent Appraiser'' means Peter M. Scotti & Associates of 
Providence, Rhode Island.
    (g) ``Purchase'' means the Fund's acquisition of the Property from 
Realty Corp for cash.
    (h) ``Appraisal Report'' means the report prepared by the 
Independent Appraiser appraising the Property, detailing the 
appraiser's findings, methodologies, and conclusions regarding the 
value of the Property.

Section II. Covered Transactions

    The restrictions of ERISA sections 406(a)(1)(A), 406(a)(1)(D), 
406(b)(1), and 406(b)(2) do not apply to the Fund's purchase of the 
Property from Realty Corp, a party in interest with respect to the 
Fund, provided the conditions in Section III are met.

Section III. Conditions

    (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 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 in an Appraisal Report 
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: (1) 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 (2) waives any rights, claims or remedies of the 
Fund or its participants and beneficiaries under ERISA or other Federal 
and state laws against the Independent Appraiser with respect to the 
Purchase;
    (g) 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 its participants and beneficiaries, 
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 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#7a1f57353f3e3a1e1516541d150c"><span class="__cf_email__" data-cfemail="fa9fd7b5bfbeba9e9596d49d958c">[email&#160;protected]</span></a> within 60 days of 
the date of closing of the Purchase;
    (h) The Independent Fiduciary 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 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 that is the subject of the exemption;
    (i) The Independent Fiduciary 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;
    (j) The Fund's Board of Trustees and the Independent Fiduciary 
maintain for 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 (k)(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 (k) below; and
    (k)(1) Except as provided in section (2) of this paragraph and 
notwithstanding any provisions of subsections (a)(2) and (b) of ERISA 
section 504, the records referred to in paragraph (j) above shall be 
unconditionally available at their

[[Page 66166]]

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 Fund, 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;
    (l) 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
    (m) All the material facts and representations made by the 
Applicant that are set forth in the Summary of Facts and 
Representations of the Proposed Exemption are true and accurate at all 
times. If there is any material change in a transaction covered by the 
exemption, or in a material fact or representation described by the 
Applicant in the application, the exemption will cease to apply as of 
the date of the change.
    Exemption date: The exemption will be in effect as of the date of 
publication of this final exemption in the Federal Register.

    Signed at Washington, DC, this 14th day of October, 2026.
Christopher Motta,
Director, Office of Exemption Determinations, Employee Benefits 
Security Administration, U.S. Department of Labor.
[FR Doc. 2026-21277 Filed 10-16-26; 8:45 am]
BILLING CODE 4510-29-P


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