DOL Issues Interim Final Rules on Abandoned Plan Regulations; Comments Due July 16
Published May 16, 2024
The U.S. Department of Labor (DOL) Employee Benefits Security Administration (EBSA) issued an interim final rule that amends the abandoned plan program regulations and streamlines procedures for the termination of, and distribution of benefits from, individual account pension plans that have been abandoned by their sponsoring employers.
The amendments affect employee benefit plans (primarily small defined contribution plans), participants and beneficiaries, service providers, and individuals appointed to serve as bankruptcy trustees under chapter 7 of the U.S. Bankruptcy Code.
In addition, the DOL is also issuing an exemption amendment to Prohibited Transaction Exemption (PTE) 2006-06, the prohibited transaction exemption accompanying the Abandoned Plan Program regulations. The exemption permits a qualified termination administrator (QTA) of an individual account pension plan that has been abandoned by its sponsoring employer to select itself to provide services to the plan in connection with the plan’s termination and pay itself fees for the services.
The effective date for both the interim final rule and exemption amendment is July 16, 2024. In addition, comments are due the same date.