ORI
Advisory Opinion Procedures
ERISA Proc. 76-1Procedure for ERISA Advisory Opinions.
It is the practice of the Department of Labor (the Department) to answer
inquiries of individuals or organizations affected, directly or indirectly, by
the Employee Retirement Income Security Act of 1974 (Pub. L. 93-406, hereinafter
"the Act") as to their status under the Act and as to the effect of
certain acts and transactions. The answers to such inquiries are categorized as "information
letters" and "advisory opinions." This "ERISA Procedure"
(ERISA Proc. 76-1) describes the general procedures of the Department in issuing
information letters and advisory opinions under the Act, and is designed to
promote efficient handling of inquiries and to facilitate prompt responses.
Section 7 of this procedure (instructions to individuals and organizations
requesting advisory opinions relating to prohibited transactions and common
definitions) is reserved. This section will set forth the procedures to be
followed to obtain an advisory opinion relating to prohibited transactions and
common definitions, such as whether a person is a party in interest and a
disqualified person. In general, this section will incorporate a revenue
procedure to be published by the Internal Revenue Service.
This advisory opinion procedure consists of rules of agency procedure and
practice, and is therefore excepted under 5 U.S.C. 552(b)(3)(A) of the
Administrative Procedure Act from the ordinary notice and comment provisions for
agency rulemaking. Accordingly, the procedure is effective August 27, 1976.
SEC. 1. Purpose. The purpose of this ERISA Procedure is to describe
the general procedures of the Department of Labor (the Department) in issuing
information letters and advisory opinions to individuals and organizations under
the Employee Retirement Income Security Act of 1974 (Pub. L. 93-406),
hereinafter referred to as "the Act." This ERISA Procedure also
informs individuals and organizations, and their authorized representatives,
where they may direct requests for information letters and advisory opinions,
and outlines procedures to be followed in order to promote efficient handling of
their inquiries.
SEC. 2. General practice. It is the practice of the Department to
answer inquiries of individuals and organizations, whenever appropriate, and in
the interest of sound administration of the Act, as to their status under the
Act and as to the effects of their acts or transactions. One of the functions of
the Department is to issue information letters and advisory opinions in such
matters.
SEC. 3. Definitions. .01 An "information letter" is a
written statement issued either by the Pension and Welfare Benefit Programs
(Office of Employee Benefits Security), U.S. Department of Labor, Washington,
D.C. or a Regional Office or an Area Office of the Labor-Management Services
Administration, U.S. Department of Labor, that does no more than call attention
to a well-established interpretation or principle of the Act, without applying
it to a specific factual situation. An information letter may be issued to any
individual or organization when the nature of the request from the individual or
the organization suggests that it is seeking general information, or where the
request does not meet all the requirements of section 6 or 7 of this procedure,
and it is believed that such general information will assist the individual or
organization.
- .02 An "advisory opinion" is a written statement issued to an
individual or organization, or to the authorized representative of such
individual or organization, by the Administrator of Pension and Welfare Benefit
Programs or his delegate, that interprets and applies the Act to a specific
factual situation. Advisory opinions are issued only by the Administrator of
Pension and Welfare Benefit Programs or his delegate.
- .03 Individuals and organizations are those persons described in section 4
of this procedure.
SEC. 4. Individuals and organizations who may request advisory opinions
or information letters. .01 Any individual or organization affected directly
or indirectly, by the Act may request an information letter or an advisory
opinion from the Department.
- .02 A request by or for an individual or organization must be signed by the
individual or organization, or by the authorized representative of such
individual or organization. See section 7.03 of this procedure.
SEC. 5. Discretionary Authority to Render Advisory Opinions. .01 The
Department will issue advisory opinions involving the interpretation of the
application of one or more sections of the Act, regulations promulgated under
the Act, interpretive bulletins, or exemptions issued by the Department to a
specific factual situation. Generally, advisory opinions will be issued by the
Department only with respect to prospective transactions (i.e., a transaction
which will be entered into). Moreover, there are certain areas where, because of
the inherently factual nature of the problem involved, or because the subject of
the request for opinion is under investigation for a violation of the Act, the
Department ordinarily will not issue advisory opinions. Generally, an advisory
opinion will not be issued on alternative courses of proposed transactions, or
on hypothetical situations, or where all parties involved are not sufficiently
identified and described, or where material facts or details of the transaction
are omitted.
- .02 The Department ordinarily will not issue advisory opinions relating to
the following sections of the Act:
- .02(a) Section 3(18), relating to whether certain consideration constitutes
adequate consideration;
- .02(b) Section 3(26), relating to whether the valuation of any asset is at
current value;
- .02(c) Section 3(27), relating to whether the valuation of any asset is at
present value;
- .02(d) Section 102(a)(1), relating to whether a summary plan description is
written in a manner calculated to be understood by the average participant.
- .02(e) Section 103(a)(3)(A), relating to whether the financial statements
and schedules required to be included in the Annual Report are presented fairly
in conformity with generally accepted accounting principles applied on a
consistent basis;
- .02(f) Section 103(b)(1), relating to whether a matter must be included in a
financial statement in order to fully and fairly present the financial statement
of the plan;
- .02(g) Section 202 (other than section 202(a)(3) and (b)(1)) relating to
minimum participation standards;
- .02(h) Section 203 (other than sections 202(a)(3)(B), (b)(1) (flush
language), (b)(2), (b)(3)(A);
- .02(i) Section 204 of the Act (other than sections 204(b)(1)(B), (b)(1)(A),
(C), (D), (E)), relating to benefit accrual requirements;
- .02(j) Section 205(e), relating to the period during which a participant may
elect in writing not to receive a joint and survivor annuity;
- .02(k) Section 208, relating to mergers and consolidation of plans or
transfer of plan assets;
- .02(1) Section 209(a)(1), relating to whether the report required by section
209(a)(1) is sufficient to inform the employee of his accrued benefits under the
plan, etc.
- .02(m) Sections 302 through 305, relating to minimum funding standards;
- .02(n) Section 403(c)(1), relating to the purposes for which plan assets
must be held;
- .02(o) Section 404(a), relating to fiduciary duties as applied to particular
conduct; and,
- .02(p) Section 407(a)(2) and (3) and (c)(1), relating to fair market value,
as applied to whether the value of any particular security or real property
constitutes fair market value.
This list is not all inclusive and the Department may decline to issue
advisory opinions relating to other sections of the Act whenever warranted by
the facts and circumstances of a particular case. The Department may, when it is
deemed appropriate and in the best interest of sound administration of the Act,
issue information letters calling attention to established principles under the
Act, even though the request that was submitted was for an advisory opinion.
- .03 Pending the adoption of regulations (either temporary or final)
involving the interpretation of the application of a provision of the Act,
consideration will be given to the issuance of advisory opinions relating to
such provisions of the Act only under the following conditions:
- .03(a) If an inquiry presents an issue on which the answer seems to be clear
from the application of the provisions of the Act to the facts described, the
advisory opinion will be issued in accordance with the procedures contained
herein.
- .03(b) If an inquiry presents an issue on which the answer seems reasonably
certain but not entirely free from doubt, an advisory opinion will be issued
only if it is established to the satisfaction of the Department, that a business
emergency requires an advisory opinion or that unusual hardship to the plan or
its participants and beneficiaries will result from failure to obtain an
advisory opinion. In any case in which the individual or organization believes
that a business emergency exists or that an unusual hardship to the plan or its
participants and beneficiaries will result from the failure to obtain an
advisory opinion, the individual or organization should submit with the request
a separate letter setting forth the facts necessary for the Department to make a
determination in this regard. In this connection, the Department will not deem a
"business emergency" to result from circumstances within the control
of the individual or organization such as, for example, scheduling within an
inordinately short time the closing date of a transaction or a meeting of the
Board of Directors or the shareholders of a corporation.
- .03(c) If an inquiry presents an issue that cannot be reasonably resolved
prior to the issuance of a regulation, an advisory opinion will not be issued.
- .04 The Department ordinarily will not issue advisory opinions on the form
or effect in operation of a plan, fund, or program (or a particular provision or
provisions thereof) subject to Title I of the Act. For example, the Department
will not issue an advisory opinion on whether a plan satisfies the requirements
of Parts 2 and 3 of Title I of the Act.
SEC. 6. Instructions to individuals and organizations requesting
advisory opinions from the Department. .01 If an advisory opinion is
desired, a request should be submitted to: Office of Regulations and Interpretations, Room N5669,
Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution
Avenue, N.W., Washington, D.C. 20210.
- 02 A request for an advisory opinion must contain the following
information:
- 02(a) The name and type of plan or plans (e.g., pension, profit-sharing, or
welfare plan); the Employer Identification Number (EIN); the Plan Number (PN)
used by the plan in reporting to the Department of Labor on Form EBS-1 or a copy
of the first two pages of the most recent Form EBS-1 filed with the Department.
- 02(b) A detailed description of the act or acts or transaction or
transactions with respect to which an advisory opinion is requested. Where the
request pertains to only one step of a larger integrated act or transaction, the
facts, circumstances, etc., must be submitted with respect to the entire
transaction. In addition, a copy of all documents submitted must be included in
the individual's or organization's statement and not merely incorporated by
reference, and must be accompanied by an analysis of their bearing on the issue
or issues, specifying the pertinent provisions.
- 02(c) A discussion of the issue or issues presented by the act or acts or
transaction or transactions which should be addressed in the advisory opinion.
- 02(d) If the individual or organization is requesting a particular advisory
opinion, the requesting party must furnish an explanation of the grounds for the
request, together with a statement of relevant supporting authority. Even though
the individual or organization is urging no particular determination with regard
to a proposed or prospective act or acts or transaction or transactions, the
party requesting the ruling must state such party's views as to the results of
the proposed act or acts or transaction or transactions and furnish a statement
of relevant authority to support such views.
- .03 A request for an advisory opinion by or for an individual or
organization must be signed by the individual or organization or by the
individual's or organization's authorized representative. If the request is
signed by a representative of an individual or organization, or the
representative may appear before the Department in connection with the request,
the request must include a statement that the representative is authorized to
represent the individual or organization.
- .04 A request for an advisory opinion that does not comply with all the
provisions of this procedure will be acknowledged, and the requirements that
have not been met will be noted. Alternatively, at the discretion of the
Department, the Department will issue an information letter to the individual or
organization.
- .05 If the individual or organization or the authorized representative,
desires a conference in the event the Department contemplates issuing an adverse
advisory opinion, such desire should be stated in writing when filing the
request or soon thereafter in order that the Department may evaluate whether in
the sole discretion of the Department, a conference should be arranged and at
what stage of the consideration a conference would be most helpful.
- .06 It is the practice of the Department to process requests for information
letters and advisory opinions in regular order and as expeditiously as possible.
Compliance with a request for consideration of a particular matter ahead of its
regular order, or by a specified time, tends to delay the disposition of other
matters. Requests for processing ahead of the regular order, made in writing
(submitted with the request or subsequent thereto) and showing clear need for
such treatment, will be given consideration as the particular circumstances
warrant. However, no assurance can be given that any letter will be processed by
the time requested. The Department will not consider a need for expedited
handling to arise if the request shows such need has resulted from circumstances
within the control of the person making the request.
- .07 An individual or organization, or the authorized representative desiring
to obtain information relating to the status of his or her request for an
advisory opinion may do so by contacting the Office of Regulatory Standards and
Exceptions, Pension and Welfare Benefit Programs, U.S. Department of Labor,
Washington, D.C.
SEC. 7. Instructions to individuals and organizations requesting
advisory opinions relating to prohibited transactions and common definitions.
.01 [Reserved]
- .02 [Reserved]
- .03 [Reserved]
SEC. 8. Conferences at the Department of Labor. If a conference has
been requested and the Department determines that a conference is necessary or
appropriate, the individual or organization or the authorized representative
will be notified of the time and place of the conference. A conference will
normally be scheduled only when the Department in its sole discretion deems it
will be necessary or appropriate in deciding the case. If conferences are being
arranged with respect to more than one request for an opinion letter involving
the same individual or organization, they will be so scheduled as to cause the
least inconvenience to the individual or organization.
SEC. 9. Withdrawal of requests. The individual or organization's
request for an advisory opinion may be withdrawn at any time prior to receipt of
notice that the Department intends to issue an adverse opinion, or the issuance
of an opinion. Even though a request is withdrawn, all correspondence and
exhibits will be retained by the Department and will not be returned to the
individual or organization.
SEC. 10. Effect of Advisory Opinion. An advisory opinion is an
opinion of the Department as to the application of one or more sections of the
Act, regulations promulgated under the Act, interpretive bulletins, or
exemptions. The opinion assumes that all material facts and representations set
forth in the request are accurate, and applies only to the situation described
therein. Only the parties described in the request for opinion may rely on the
opinion, and they may rely on the opinion only to the extent that the request
fully and accurately contains all the material facts and representations
necessary to issuance of the opinion and the situation conforms to the situation
described in the request for opinion.
SEC. 11. Effect of Information Letters. An information letter issued
by the Department is informational only and is not binding on the Department
with respect to any particular factual situation.
SEC. 12. Public inspection. .01 Advisory opinions shall be open to
public inspection at the Public Disclosure Room, U.S. Department of Labor, 200
Constitution Avenue, N.W., Washington, D.C. 20216.
- 02 Background files (including the request for an advisory opinion,
correspondence between the Department and the individual or organization
requesting the advisory opinion) shall be available upon written request.
Background files may be destroyed after three years from the date of issuance.
- .03 Advisory opinions will be modified to delete references to proprietary
information prior to disclosure. Any information considered to be proprietary
should be so specified in a separate letter at the time of request. Other than
proprietary information, all materials contained in the public files shall be
available for inspection pursuant to section 12.02.
- .04 The cost of search, copying and deletion of any references to
proprietary information will be borne by the person requesting the advisory
opinion or the background file.
SEC. 13. Effective date. This procedure is effective August 27,
1976, the date of its publication in the Federal Register.
Signed at Washington, D.C., this 24th day of August 1976.
James D. Hutchinson
Administrator of
Pension and Welfare Benefit Programs
U.S. Department of Labor
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