UNEMPLOYMENT
INSURANCE / SOCIAL SECURITY
ProSystem fx® Engagement
ProSystem fx® Engagement streamlines your processes at all stages of plan administration with integrated workflow features for administration tracking, reporting, review and sign-off, and archiving.
Tuition reimbursement payments made by a union-sponsored trust to provide reimbursement to affiliated local unions for the expenses incurred by members in completing a welding program would not constitute a prohibited transaction if the reimbursement was pursuant to a clear agreement and the trust was not charged any interest or required to make other payments, according to an Employee Benefits Security Administration (EBSA) opinion letter.
ERISA §406(b)(1) prohibits a fiduciary with respect to a plan from dealing with the assets of the plan in his or her own interest or for his or her own account. However, ERISA §408(b)(2) provides a statutory exemption from the prohibitions of ERISA §406(b) (1) for contracting or making reasonable arrangements with a party in interest, including a fiduciary, for services necessary for the establishment or operation of a plan, if no more than reasonable compensation is paid. The local unions would be considered parties in interest to the trust as a service provider who facilitates training opportunities that allow the trust to achieve its training goals. Absent an exemption, such services by the local to the trust would be a prohibited transaction. However, EBSA stated its opinion that where there is a clear agreement, such as evidenced by relevant plan language, entered into at or before the advance of money by the local for tuition payments, without interest or other additional payments charged to the trust, the requirements for the statutory exemption would be met.
For more information on this and related topics, consult the CCH Pension Plan Guide.
Visit our News Library to read more news stories.
©2009, CCH. All Rights Reserved.
