DoL Asks for Comments Regarding Plan Loans to Parties in Interest

According to a notice in the Federal Register, the DoL is particularly interested in comments that:

• Evaluate whether the proposed collection of information is necessary for the proper performance of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency’s burden estimate in the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including suggestions for appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

The notice explains that the Employee Retirement Income Security Act (ERISA) prohibits a plan fiduciary from causing the plan to engage in a transaction if he knows or should know that such transaction constitutes a direct or indirect loan or extension of credit between the plan and a party in interest, but exempts from this prohibition loans from a plan to parties in interest who are participants and beneficiaries of the plan, provided that certain requirements are satisfied.

The department issued final rules in 1989 spelling out information that must be provided to the DoL regarding provisions plan documents must include in order that a plan may make loans to such participants.

The DoL said that, after considering all the responses to this notice, it intends to submit a request to the Office of Management and Budget for continuing approval of its information request procedures in cases of loans to parties in interest.

The current notice is  here .