November 24, 1993
TO: PENSION COMMITTEE NO. 38-93
RE: FINAL REPORT OF ERISA ADVISORY COUNCIL WORK GROUP ON
PROHIBITED TRANSACTIONS
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As we reported earlier this year, the U.S. Department of Labor's ERISA
Advisory Council established a Work Group on Prohibited Transactions to
examine the current system for processing requests for exemptions from ERISA's
prohibited transaction provisions. In September, the Institute testified
before the Work Group and recommended that the Department consider adopting a
process similar to the "no-action" process used by the Securities and Exchange
Commission under the Investment Company Act of 1940, in order to provide more
guidance to the public. (See Institute Memorandum to Board of Governors No.
84-93 and Pension Members No. 34-93, dated September 27, 1993.)
The Institute is pleased to advise you that the final report of the Work
Group, a copy of which is attached, recommends that the Department of Labor
consider the "no action" letter approach. In addition, the report recommends
the development of more class exemptions, a streamlined process for
commonplace transactions, and measures to identify and avoid unnecessary
delays by applicants and the Department.
We will keep you informed of developments.
Kathy D. Ireland
Associate Counsel - Pension
Attachment