What Is an Individual Prohibited Transaction Exemption for a 401(k) Plan?

This form of DOL relief is not a private waiver. It is transaction-specific administrative permission built on a public evidentiary record. When no statutory or class exemption fits, the applicant must show why DOL can permit a defined prohibited transaction without sacrificing the protections ERISA was designed to impose.^[1][2][4]

That changes the work.

With a class exemption, the main question is:

Do our facts fit an existing rule?

With an individual exemption, the harder question is:

What facts and safeguards justify DOL creating relief for this transaction?

Individual Relief Is Narrow by Design

The current regulation defines an individual exemption as administrative relief that applies only to the:

• specific parties in interest
• exemption transaction or transactions

named or otherwise defined in the grant.^[2]

Another plan cannot copy the number and claim the relief.

A class exemption is different. Anyone inside its defined class can use it if every condition is met.

That difference is why individual grants often read like transaction documents: named entities, exact assets, pricing rules, independent fiduciary duties, notice requirements and time limits.

A PTE Number Does Not Mean "Class Exemption"

DOL may label a transaction-specific grant:

PTE 2026-01

or:

PTE 2026-05.^[8][9][10]

"PTE" means prohibited transaction exemption.

It does not mean the relief is class-wide.

PTE 2026-01, for example, involves a Liberty Latin America retirement plan and certain stock rights.^[8][9]

A different 401(k) cannot say:

"Our transaction looks similar, so we are using PTE 2026-01."

The prior grant can be precedent.

It is not authority for the new plan.

Individual Relief Usually Comes After the Existing Rules Are Exhausted

A disciplined analysis runs in this order:

Is the transaction prohibited? → does a statutory exemption apply? → does a class exemption apply? → could EXPRO fit? → if not, is an individual application justified?

That order saves time and money.

The ordinary individual process can require:

• ERISA counsel
• independent fiduciary
• valuation work
• detailed economic evidence
• public filing
• participant notice
• DOL review
• possible hearing issues.

If an existing exemption already solves the conflict cleanly, there is little reason to build a custom administrative case.

Class, EXPRO and Individual Relief Are Different

INV-164 covers EXPRO in detail.^[12]

Its advantage is precedent.

The ordinary individual process is broader, but the applicant has to build a stronger transaction-specific record.

An Advisory Opinion Is Not an Exemption

Suppose the legal uncertainty is:

Is this entity a party in interest?

An advisory opinion may help interpret the law on stated facts.

If the answer becomes:

Yes, and the proposed transaction is prohibited

the opinion does not create permission.

An exemption is still needed unless another statutory or administrative route already applies.

Interpretation and relief are different legal products.

VFCP Solves a Different Problem

DOL's Voluntary Fiduciary Correction Program addresses specified violations through prescribed correction methods and no-action treatment when its conditions are met.^[13]

That is not the same as a Section 408(a) exemption application.

A past operational failure may fit VFCP.

A novel prospective sale between a plan and sponsor affiliate may call for exemptive analysis.

Using the same word—"relief"—does not make the programs interchangeable.

DOL Must Make Three Findings

ERISA Section 408(a) allows DOL to grant administrative relief only if it finds the exemption is:^[2][4]

1. administratively feasible
2. in the interests of the plan and its participants and beneficiaries
3. protective of the rights of participants and beneficiaries.

Those findings are the backbone of the application.

The applicant is not asking DOL to bless a business deal.

It is showing why a transaction that would otherwise be prohibited can be permitted without defeating ERISA's protective purpose.

Fair Value Is Necessary Evidence, Not a Complete Case

Assume a plan owns real estate worth:

$4 million.

The employer affiliate offers:

$4 million.

An independent appraisal supports the number.

That is useful.

It does not answer:

• Could the plan sell to an unrelated buyer for more?
• Why does the plan need to sell now?
• Does the affiliate receive strategic value?
• Who negotiated for the plan?
• What costs does the plan bear?
• What safeguards prevent sponsor influence?
• Does the transaction reduce or increase plan risk?

Fair value answers:

What is the asset worth?

Section 408(a) asks:

Why should this conflicted transaction be permitted?

The Current Procedure Took Effect April 8, 2024

Current applications are governed by:

29 CFR Part 2570, Subpart B.^[2]

DOL revised the procedure in January 2024.

The amended rules apply to applications filed or initiated on or after:

April 8, 2024.^[2][3]

Older applications remain governed by the earlier procedural version based on their filing date.

For new 2026 work, a 2011 checklist is stale.

The 2024 Rule Forces the Full Economics Into the Application

Section 2570.34 requires far more than the legal conclusion:

"Section 406 applies."^[2]

The applicant describes:

• applicant and contact information
• transaction in detail
• every party in interest
• any larger integrated transaction
• chronology
• reasons for the deal
• material counterparty benefits
• plan economics, including costs and benefits
• nonprohibited alternatives
• why those alternatives were rejected
• exact prohibited provisions
• conflicts or self-dealing
• investigations or enforcement activity
• hardship or economic loss if relief is denied.

That structure is deliberate.

It makes selective storytelling harder.

The Larger Transaction Cannot Be Hidden Behind One Contract

Suppose the plan sells a parcel to the sponsor for:

$5 million.

The sale contract looks ordinary.

But the sponsor also:

• owns the adjoining parcel
• gains development control
• terminates an expensive lease
• resolves a covenant problem.

Those facts can change the economics.

The application must describe the integrated transaction rather than isolating the instrument that technically transfers title.^[2]

A deal can be fair on one document and still transfer value elsewhere.

Counterparty Benefits Matter Even When No Cash Is Paid

Current rules require disclosure of material benefits to parties in interest and affiliates.^[2]

The benefit can include avoiding a materially adverse outcome.

Examples:

• avoiding default
• gaining control
• clearing title
• removing lease obligations
• assembling adjacent property
• preserving financing.

A sponsor can receive meaningful value without receiving a check from the plan.

If the counterparty's benefit is economically relevant, it belongs in the record.

Quantify What the Plan Gives Up and Receives

"Improves liquidity" is weak evidence.

A stronger filing may show:

• cash proceeds
• carrying costs eliminated
• expected transaction costs
• expected tax effects
• outside offers
• foregone rental income
• expected time to market
• concentration change.

The current rule asks the applicant to quantify the plan's economic costs and benefits where possible.^[2]

DOL should be able to see the economic case rather than infer it from adjectives.

Nonprohibited Alternatives Must Be Taken Seriously

The application identifies alternatives that would avoid the prohibited transaction and explains why they were not pursued.^[2]

That forces a basic fiduciary question:

Why transact with the conflicted party at all?

Possible alternatives include:

• public-market sale
• unrelated buyer
• unrelated lender
• unrelated service provider
• different investment structure
• delay
• restructuring.

If an unrelated alternative is cheaper, safer and equally effective, the exemption case becomes harder.

The process does not exist to preserve sponsor preference.

The Application Must Identify Every Prohibition

"Related-party transaction" is not enough.

The applicant identifies the prohibited-transaction provisions from which relief is requested and explains why each applies.^[2]

Depending on the facts, that can include:

• sale or exchange
• lending
• furnishing of services
• transfer or use of plan assets
• fiduciary self-dealing
• adverse representation
• third-party consideration
• employer-security or employer-real-property restrictions.

This matters because DOL grants the relief it actually analyzes.

A transaction can fit one exempted clause and remain prohibited under another.

The 2024 Procedure Also Requires Conduct Representations

Where applicable, the application addresses whether:^[2][3]

• the transaction is in the plan's best interest
• compensation is reasonable
• statements about the transaction are not materially misleading.

The current definition of best interest uses a prudent-person concept and prohibits subordinating the plan's interests to those of the fiduciary or another party.^[2]

These application representations do not replace Section 404.

They make the applicant explain how the proposed conflict will be controlled in practice.

Somebody With Authority Signs the Certification

The application includes a dated certification that the signer is familiar with the matters discussed and that, to the best of the signer's knowledge and belief, the representations are true and correct.^[2]

For a plan applicant, the signer is the fiduciary with authority, responsibility or control over the exemption transaction.^[2]

That is an accountability mechanism.

The application is not merely counsel's theory of the deal.

A plan decision-maker stands behind the facts.

Who Can File?

Section 2570.32 permits an application by:^[2]

• a party in interest that is or may become a party to the transaction
• the plan that is or may become a party.

An authorized representative can act for the applicant with the required authority documentation.^[2]

Counsel usually manages the technical filing.

The applicant still owns the representations.

Incomplete Applications Can Lose More Than Time

DOL ordinarily will not consider an application that fails to provide the required or current information.^[2]

The procedure also limits conference and tentative-denial rights for an applicant that has not submitted a complete record.^[2]

That makes completeness strategically important.

A weak approach is:

File something thin and let DOL tell us what to add.

A better approach is:

Identify the statutory findings and build the evidence before filing.

The analyst should be evaluating a case, not inventing one.

Independent Fiduciaries Often Carry the Protective Burden

A qualified independent fiduciary can be central when the sponsor, manager or counterparty has a direct conflict.

Current Part 2570 looks for:^[2]

• appropriate training
• relevant experience
• adequate facilities
• ability to act as an ERISA fiduciary
• independence from involved parties and affiliates.

DOL evaluates all facts and circumstances.

The label:

independent fiduciary

is not self-proving.

The 2% and 5% Revenue Guideposts Are Easy to Misstate

For a qualified independent fiduciary, DOL looks at revenue received or projected from the parties in interest and affiliates involved in the transaction.^[2]

The current rule generally will not conclude that independence is compromised solely because of that revenue when it does not exceed:

2%.^[2]

Above 2%:

closer scrutiny.

The facts can still support independence when relevant revenue does not exceed:

5%.^[2]

The regulation's revenue framework does not preserve that path once the percentage exceeds 5%.

The same basic percentages appear in the qualified independent appraiser definition.^[2]

Two Percent Is Not an Independence Safe Harbor

Assume a proposed fiduciary receives only:

1.4%

of annual revenue from the sponsor group.

Other facts show:

• sponsor selected the firm without plan-side review
• sponsor can terminate it for rejecting the deal
• senior personnel have extensive unrelated business with the sponsor
• compensation rises if the transaction closes.

The low revenue percentage does not solve those facts.

The rule says revenue at or below 2% generally does not compromise independence by itself.^[2]

Independence remains a facts-and-circumstances judgment.

Example: 3.2% Revenue Exposure

Candidate fiduciary earns:

3.2%

of relevant annual revenue from involved parties.

That exceeds the ordinary 2% level.

It remains below the 5% outer boundary.

The file should address:

• who selected the fiduciary
• termination rights
• other sponsor relationships
• engagement history
• compensation design
• relevant expertise
• conflicts.

If an equally capable candidate receives only 0.3% of revenue from the sponsor group, the plan should have a real reason for selecting the more economically connected firm.

Selection of the Independent Fiduciary Is Itself Fiduciary Work

Where an application uses a QIF, current rules call for a representation that an appropriate plan fiduciary prudently selected it after diligent review of matters such as:^[2]

• ERISA and Code proficiency
• transaction-specific expertise
• fiduciary liability insurance.

That requirement prevents the conflicted party from simply installing a nominal reviewer.

The plan needs an independent decision-maker with the ability and information to challenge the transaction.

The QIF's Written Record Is Substantial

A current application involving a qualified independent fiduciary can require evidence concerning:^[2]

• engagement contract
• qualifications
• insurance
• relevant relationships
• fiduciary acknowledgment
• absence of material conflicts
• independence from sponsor agency
• revenue exposure
• regulatory and litigation history
• specified conviction history
• conclusion that the transaction is in plan interests and protective.

For an ongoing arrangement, the fiduciary also needs authority to monitor the transaction and enforce the conditions.^[2]

One signature at closing is not enough when the risk continues for years.

The Engagement Contract Cannot Empty the Fiduciary Role

The current procedure restricts contractual provisions that would undercut accountability.^[2]

The engagement cannot:

• violate ERISA Section 410
• broadly waive plan rights
• insulate the fiduciary from consequences of failing to follow law or the engagement.

A narrower legal-expense reimbursement arrangement can be permitted under specified conditions.^[2]

The principle is simple:

the person hired to protect the plan cannot be made economically harmless for failing to do the job.

Independent Appraisers Face Their Own Independence Test

A qualified independent appraiser must have:^[2]

• appropriate training
• relevant experience
• adequate facilities
• independence from involved parties.

The same 2% / 5% revenue architecture matters.

Selection influence matters too.

A report is not independent merely because its cover page says:

Independent Appraisal.

Who selected the appraiser, who pays it, what other work it performs and what relationships exist can all matter.

The Appraiser Must Address the Right Value

The current procedure requires the valuation method to be explained and tied to fair market value without bias toward the counterparty.^[2]

The appraiser also addresses special benefits the related party may receive.

That is crucial in transactions involving:

• adjoining parcels
• control blocks
• voting rights
• assemblage value
• strategic operating assets.

A sponsor may rationally pay more than a generic market buyer because the asset is worth more to the sponsor.

If the plan gives away that special value, "fair market value" can become an incomplete protection.

Appraisal Timing Is Specific

A qualifying appraisal generally may not be more than:

one year old

on the transaction date.^[2]

The appraiser also provides a written update affirming the appraisal's accuracy as of the transaction date.^[2]

That avoids a common mistake:

The appraisal was less than a year old, so no closing-date update was needed.

Age and transaction-date confirmation are separate requirements.

Plan-Specific Information Lets DOL Measure Exposure

Section 2570.35 adds information for individual requests, including:^[2]

• plan type
• EIN and plan number
• participant/beneficiary count
• total assets
• percentage of assets involved
• authority over affected assets
• existing related-party holdings
• prior related transactions
• investigation history
• whether the transaction has already occurred
• who pays application, transaction and notice expenses.

Those facts convert a deal from an isolated contract into a plan-risk picture.

The Same Dollar Deal Can Have Very Different Significance

Consider a:

$6 million

related-party purchase.

Plan A

Total assets:

$30 million.

Transaction:

20% of plan assets.

Plan B

Total assets:

$2 billion.

Transaction:

0.3%.

The same asset can create radically different concentration and liquidity consequences.

That is why the application asks for percentage exposure, not just transaction price.^[2]

Existing Related-Party Exposure Must Be Disclosed

The filing addresses whether the plan already holds:^[2]

• loans to the same party
• leased property involving it
• securities issued by it
• other relevant related-party assets.

The point is cumulative risk.

A new 4% exposure may look modest.

If the plan already has 20% tied to the same corporate group, the transaction belongs in a different context.

Pooled Funds Do Not Eliminate Plan-Level Questions

Part 2570 modifies some requirements for pooled funds but requires additional information in specified cases.^[2]

A participating plan can receive special attention when it represents more than:

20%

of pooled-fund assets or has other relevant sponsor/fiduciary relationships.^[2]

A pooled structure can diversify operational administration.

It does not erase the economic consequences for a large participating plan.

Prospective Relief Is the Cleaner Route

The safest sequence is:

identify conflict before closing → design protections → file → obtain final exemption → close within the conditions.

That allows the plan to install:

• independent fiduciary
• valuation
• market testing
• pricing rules
• monitoring
• cost protections

before assets move.

Retroactive relief exists because mistakes happen.

It should not be a transaction strategy.

Retroactive Relief Receives Heightened Scrutiny

The current rule generally considers retroactive relief only where:^[2][3]

1. safeguards necessary for prospective relief were already in place when the parties entered the transaction
2. participants and beneficiaries were not harmed.

The applicant also demonstrates that responsible fiduciaries acted in good faith to protect the plan from:

• abuse
• loss
• risk.^[2]

The distinction is evidentiary.

A safeguard created after discovery shows remediation.

It does not prove the plan was protected when the prohibited transaction occurred.

Good-Faith Evidence Is Concrete

Part 2570 identifies facts that can support a retroactive case, including:^[2]

• independent fiduciary involvement before the transaction
• contemporaneous independent appraisal or objective valuation source
• competitive bidding
• comparable unrelated-party transactions
• accurate and complete application
• contemporaneous reasoned legal analysis
• evidence explaining how the problem was discovered and addressed
• independent support showing economics at least as favorable as an unrelated transaction
• other protective undertakings.

A plan that did those things before discovering the exemption defect has a much stronger story than one that reconstructed the controls later.

Hiring the Independent Fiduciary After Closing Is Weaker

DOL can, in its discretion, consider a retrospective independent review when exigent circumstances explain why the fiduciary was not appointed before the transaction.^[2]

That is not a routine substitute for advance review.

If the sponsor closed first because:

"We did not want to wait"

that is not the same as an emergency preventing advance safeguards.

Retroactive relief is weakest when the protective architecture was invented after the violation.

Plan Loss Is a Serious Retroactive Barrier

As a general matter, DOL says it will not consider retroactive relief when the transaction resulted in plan loss based on facts existing when the application is filed.^[2]

The Department also generally will not entertain relief inconsistent with ERISA Sections 403 or 404 or the Code's exclusive-benefit requirements.^[2][3]

Repaying money can be important correction.

It does not create a right to retroactive exemption.

Worked Example: Close First, Explain Later

Plan sells property to sponsor affiliate.

At closing:

• no independent fiduciary
• no bidding process
• sponsor selected the appraiser
• appraisal supports the sale price.

Six months later counsel identifies a prohibited transaction.

The sponsor hires:

• a new appraiser
• an independent fiduciary.

Both conclude the old price was fair.

That helps on valuation.

It does not recreate:

• independent negotiation
• market exposure
• protective review

at the moment the plan gave up the property.

That is exactly why retroactive treatment is difficult.

Pre-Submission Contact Can Save Work

DOL encourages potential applicants to contact the Office of Exemption Determinations before filing when useful.^[1]

Early discussion can reveal:

• a class exemption the applicant missed
• a better EXPRO route
• an overly broad relief request
• inadequate valuation
• need for an independent fiduciary
• missing facts.

That can prevent months of work on the wrong structure.

But pre-submission contact is not confidential advance approval.

The Administrative Record Is Public From Filing

Current rules make the administrative record open to public inspection from the date the application is submitted.^[2]

The record can include:

• application
• amendments
• supplemental information
• correspondence
• comments
• testimony
• other oral or written material.

Material information sent to DOL before formal filing can also become part of the record when a related application follows.^[2]

A deal team should not assume:

"We can tell DOL privately now and clean it up later."

Confidentiality Claims Can Stop Processing

For nongovernmental applicants, current rules provide that if submitted information is designated confidential, DOL will not process the application until the confidentiality claim is withdrawn.^[1][2]

That creates a real strategic decision.

Transactions may contain sensitive:

• pricing
• affiliate economics
• financing terms
• internal negotiations
• business strategy.

The exemption process is not designed as a confidential regulatory consultation.

Applicants should decide early whether they can support the transaction in a public record.

Public Filing Should Improve Drafting Discipline

A serious application is written for more than the DOL analyst.

Potential readers include:

• participants
• competitors
• litigants
• journalists
• future regulators.

That should change the drafting standard.

Avoid:

• unsupported claims
• selective economics
• inconsistent dates
• casual descriptions of conflicts
• unexplained changes in valuation.

A public record magnifies weak factual discipline.

Electronic Filing Is Available

Current Section 2570.36 permits electronic submission to OED by email.^[2]

A paper copy is not required when the application is filed electronically.^[2]

Paper remains available under the current procedure.

The transmission method is easy.

The evidence is not.

DOL's Early Service Goals Are Not Approval Deadlines

DOL's current individual-exemption page says it aims to:^[1]

• acknowledge the application and assign an analyst within two weeks
• provide a preliminary reaction within 30 days
• communicate significant developments or timing changes.

Those are service goals.

They are not a 30-day final-decision rule.

A complex case can involve:

• multiple supplemental requests
• revised valuation
• additional independent-fiduciary analysis
• Federal Register publication
• interested-person notice
• comments
• hearing issues.

Transaction schedules should not turn a service target into a closing assumption.

The Applicant Has a Continuing Duty to Correct the Record

Section 2570.37 requires prompt supplementation when:^[2]

• a material fact was inaccurate
• a material fact changes
• information affects continuing accuracy
• material information was omitted.

That duty continues while DOL considers the application and after an exemption is granted.^[2]

This matters for long-running transactions.

A fact that changes between filing and closing can alter the basis for relief.

Tentative Denial Is a Procedural Warning, Not the End

For a complete application, DOL can issue a tentative denial explaining why it is not prepared to propose or grant the exemption.^[2]

The applicant generally has:

20 days

from the tentative-denial letter to:

• request a conference
• state an intent to submit additional information
• or do both.^[2]

That window is valuable.

If DOL says the independent fiduciary failed to examine alternatives, repeating:

"The transaction is fair"

does not solve the problem.

The response should repair the evidence.

A Conference Is Not a Substitute for a Complete Filing

The conference lets the applicant address DOL's concerns.

It is not an invitation to present the real case for the first time.

Current procedure can deny conference/tentative-denial protections where required or current information was not submitted.^[2]

That encourages one practical rule:

front-load material evidence.

The strongest application anticipates the questions the analyst is likely to ask.

Final Denial Can Follow Several Paths

DOL can issue a final denial after:^[2]

• failure to provide requested information
• failure to satisfy procedural requirements
• no timely response to tentative denial
• unresolved concerns after supplementation or conference
• withdrawal
• development of the public record.

An application creates a right to consideration under the governing process.

It does not create entitlement to relief.

Reconsideration Is Limited

Part 2570 provides one qualifying reconsideration route after final denial.^[2]

The request generally must be made within:

180 days

after the final denial letter.^[2]

It must fit the rule's grounds, such as significant new facts or arguments that could not, for good reason, have been presented earlier.

Reconsideration is not an endless appeal loop.

That makes the initial record more important.

A Proposed Exemption Is Not Permission to Close

If DOL tentatively concludes relief may be warranted, it publishes a proposed exemption in the Federal Register.^[2]

The proposal describes:

• transaction
• basis for proposed relief
• proposed conditions
• comment period
• applicable hearing rights.

That is a major milestone.

It is not a final exemption.

For a prospective prohibited transaction, the safer reading is:

proposal → public process → final grant → transaction.

Closing after proposal but before final relief can create exactly the violation the applicant was trying to avoid.

Interested Persons Get Notice

After DOL publishes a proposal, the applicant gives notice to interested persons in the manner and within the time DOL specifies.^[2]

The notice generally includes:

• proposed Federal Register exemption
• supplemental statement explaining comment rights.^[2]

DOL can also require a plain-language summary describing:

• transaction
• parties
• why the transaction is prohibited
• why relief is sought
• safeguards.

The applicant must certify that notice was properly furnished before DOL issues final relief.^[2]

Participants Can Change the Record

Interested persons can submit comments.^[2][4]

That is not ceremonial.

Suppose the application says:

"No superior outside offer exists."

A participant submits evidence of:

$4.4 million unrelated bid

against the sponsor affiliate's:

$4.0 million offer.

That can materially change the interests-of-the-plan analysis.

A public exemption process gives affected people a chance to test the applicant's facts.

Hearing Rights Are Targeted

When a proposal includes specified relief from fiduciary self-dealing or related conflict provisions, materially affected interested persons receive information about hearing rights.^[2]

DOL can hold a hearing when it is necessary to explore material factual issues.

A hearing can be denied where:

• request is untimely
• required information is missing
• dispute is purely legal
• written evidence can fully resolve the facts.^[2]

Not every application produces a hearing.

The possibility matters most where factual conflicts are sharp.

Final Grant Requires the Statutory Findings Again

After reviewing:

• application
• supplements
• comments
• hearing record, if any

DOL can grant relief only if the record supports the three Section 408(a) findings.^[2][4]

The final exemption is published in the Federal Register.

It identifies:

• parties
• covered transaction
• relief
• conditions.

That final text is the legal permission.

Exemption Conditions Are Transaction Terms

Imagine final relief requires:

• independent fiduciary approval
• updated appraisal
• price no lower than a stated formula
• no plan-paid commissions
• sponsor payment of specified costs.

If the parties close without the appraisal update, they cannot say:

"DOL approved the transaction generally."

The condition is part of the relief.

A conditional exemption works only when the conditions are met.

2026 Example: Liberty Latin America 401(k) Stock Rights

DOL's 2026 list includes PTE 2026-01 for Liberty Latin America's 401(k) Savings Plan.^[8][9]

The relief concerns the plan's:

• acquisition
• holding
• sale

of certain stock rights received from Liberty Latin America Ltd.^[8][9]

The rights trace to a 2020 corporate event.

This is a useful 401(k) example because the asset is not an ordinary fund or service-provider contract.

A corporate securities event created a plan-specific prohibited-transaction problem that required transaction-specific analysis.

An Individual Grant Can Address Historical Facts Without Becoming a General Safe Harbor

PTE 2026-01 should not be read as:

"stock rights in a 401(k) are generally exempt."

It means DOL reviewed a defined set of:

• parties
• rights
• facts
• safeguards
• conditions

and granted relief for that case.^[8][9]

Another employer facing a similar corporate action can study the grant.

It cannot borrow the relief.

2026 Example: Related-Party Real Estate

PTE 2026-05 involves a sale of improved real property by the Hawai'i Pacific Health Retirement Plan to Straub Clinic & Hospital, a related entity.^[8][10]

The pricing condition requires at least the greater of:

$16,247,000

or:

110% of appraised value as of the sale date.^[10]

That condition is instructive.

DOL did not stop at:

"pay fair market value."

The specific facts produced a more protective pricing formula.

An individual exemption can impose safeguards that make sense for one transaction without creating a universal rule.

A Premium Can Be More Protective Than Fair Value Alone

Assume unrelated-market appraisal is:

$10 million.

Sponsor affiliate gets strategic benefits from ownership.

An exemption condition requires:

110% of current appraised value.

Minimum price becomes:

$11 million.

The extra $1 million can compensate the plan for a transaction whose counterparty has special value or bargaining advantages.

The exact rationale depends on the record.

The broader lesson is that related-party pricing can require more than an ordinary appraisal conclusion.

2026 Example: Individual Relief Around QPAM Disqualification

DOL's 2026 list also includes PTE 2026-03 involving UBS-related asset managers.^[8][11]

The relief allows specified managers to continue relying on PTE 84-14 despite defined criminal judgments and related corporate facts, subject to detailed conditions and a limited period.^[8][11]

That is a different use of individual relief.

The underlying transactions may otherwise fit QPAM.

The problem is entity-specific eligibility.

An individual exemption can bridge that disqualification without rewriting PTE 84-14 for the rest of the market.

Individual Relief Can Supplement a Class Exemption Without Amending It

This is important.

A manager receiving special QPAM relief does not create a new QPAM rule for competitors.

The individual grant can say, in substance:

this entity may rely on the class exemption despite this otherwise disqualifying fact, if these additional conditions are met.

That is transaction/entity-specific relief layered onto a class framework.

The class exemption itself remains unchanged.

Prior Individual Exemptions Are Useful Precedent

A prior grant can show:

• safeguards DOL has accepted
• types of independent fiduciary analysis
• valuation methods
• pricing premiums
• notice structures
• monitoring conditions.

That can make a new application more informed.

But DOL's individual-exemption page warns that older grants may not reflect current law, policy or procedure.^[1]

Precedent is evidence of administrative history.

It is not a self-executing exemption.

Worked Example: Outside Bid Makes the Related-Party Case Weak

Plan owns land.

Sponsor affiliate offers:

$4.0 million.

Independent appraisal:

$3.7 million.

Unrelated buyer offers:

$4.2 million cash

with similar timing and no material contingencies.

The sponsor says its transaction is easier.

The plan should challenge the premise before preparing an exemption application.

A nonprohibited alternative appears:

• higher priced
• less conflicted
• administratively simpler.

The individual-exemption process is not a mechanism for protecting sponsor convenience at participant expense.

Worked Example: Strategic Premium Changes the Analysis

Change the facts.

Independent appraisal for an ordinary buyer:

$3.8 million.

Sponsor owns the adjacent parcel and can create a larger development site.

Independent fiduciary negotiates:

$4.6 million

from the affiliate.

Best unrelated offer:

$4.0 million.

Sponsor also bears:

• appraisal costs
• plan legal costs
• transfer expenses.

Now the related-party route may create measurable incremental value for the plan.

The application can show:

• market test
• strategic premium
• independent negotiation
• cost shifting
• participant protection.

That is a stronger Section 408(a) record.

Worked Example: Retroactive Stock Rights

A 401(k) receives stock rights in a corporate action.

At the time:

• independent fiduciary reviews the event
• public pricing exists
• plan pays no extra consideration
• participants suffer no loss
• counsel provides contemporaneous legal analysis.

The parties later discover that administrative exemptive relief was needed.

Those facts are materially stronger for retroactive consideration than:

• sponsor-directed handling
• no valuation
• no independent review
• economic loss
• legal analysis begun only after an investigation.

Retroactive applications convert past conduct into evidence.

They cannot recreate a missing historical process.

Worked Example: Tentative Denial

DOL tentatively denies a real-estate application because:

• QIF report does not compare outside alternatives
• appraisal ignores assemblage value
• applicant underexplains sponsor benefit.

The 20-day response window should not produce another conclusion letter.

A better response is:

1. request conference
2. state intent to supplement
3. expand QIF analysis
4. obtain valuation addressing special value
5. quantify counterparty economics
6. update alternatives.

A tentative denial is most useful when the applicant treats it as a map of missing evidence.

A Granted Exemption Does Not Prove Prudence

Part 2570 preserves other ERISA and Code obligations.^[2]

DOL's 2024 rulemaking also explains that the exemption process generally does not decide whether the underlying investment is prudent.^[3]

That distinction is essential.

A transaction can be:

administratively exempt from Section 406

and still be:

imprudent under Section 404.^[6][7]

The plan fiduciary must still evaluate:

• risk
• return
• liquidity
• concentration
• alternatives
• costs
• timing.

Exemption and prudence are different approvals.

DOL Permission Is Not a Command to Transact

Suppose DOL grants relief for a related-party note.

Before closing:

• issuer credit weakens
• unrelated alternatives improve
• plan liquidity needs change.

The exemption may remain legally available.

The fiduciary can still decide:

Do not proceed.

Section 404 analysis is current and fact-sensitive.

The plan should never treat a Federal Register grant as an obligation to consummate a deal that no longer makes economic sense.

Material Facts Continue to Matter After Grant

The applicant's duty to supplement does not end when DOL publishes the exemption.^[2]

A material change can undermine the basis for relief.

Examples:

• appraiser relationship changes
• independent fiduciary loses independence
• transaction economics change
• ownership changes
• monitoring mechanism stops functioning.

The compliance file should track the conditions as ongoing obligations, not simply archive the Federal Register notice.

QIF Changes Can Trigger a 30-Day Notice

Current Section 2570.50 requires notice to DOL within:

30 days

if the qualified independent fiduciary:

• resigns
• is terminated
• is convicted of a crime.^[2]

DOL may request updated information about a replacement or the continuing structure.

For a multi-year exemption, QIF monitoring belongs on a compliance calendar.

DOL Can Modify or Revoke Relief Prospectively

If material facts, circumstances or representations change, DOL can consider modification or revocation.^[2]

The procedure generally includes:

• notice to applicant
• proposed action in Federal Register
• comment opportunity.

Modification or revocation under the current rule has:

prospective effect.^[2]

That protects transactions validly completed under prior conditions.

It does not cure a transaction that never complied with the grant.

A 2026 Rulemaking Project Could Change the Procedure Later

The 2026 Unified Agenda lists:

RIN 1210-AC42 — Amendment to Prohibited Transaction Exemption Procedures.^[14]

The agenda describes a project intended to reduce applicant burdens and improve the exemption program.

It is listed at the:

proposed rule

stage.^[14]

That is a meaningful update trigger.

It is not current law.

The Unified Agenda Does Not Rewrite Part 2570

As of August 28, 2026, the operative procedure remains the 2024 version of Part 2570.^[1][2]

An agenda entry tells the public what an agency is considering.

The CFR changes only after the required rulemaking steps produce an effective amendment.

A 2026 applicant should therefore use the current rule while monitoring RIN 1210-AC42.

Current OMB Status Is Separate

DOL's August 2026 information-collection notice identifies:

OMB Control No. 1210-0060^[15]

for the exemption application procedure.

The current approval is scheduled to expire:

February 28, 2027.^[15]

That is a paperwork-approval date.

It does not terminate:

• Section 408(a)
• Part 2570
• previously granted exemptions.

The legal rule and the Paperwork Reduction Act approval should be tracked separately.

Federal Burden Estimates Are Not the Real Transaction Budget

The information-collection notice gives federal estimates for respondents and paperwork burden.^[15]

An actual individual exemption can cost far more because the transaction may require:

• ERISA counsel
• valuation
• independent fiduciary
• financial analysis
• participant notice
• internal management time
• monitoring.

A plan should compare those costs with the economic value of the proposed transaction.

A technically available exemption can still be commercially irrational.

When Is an Individual Application Worth It?

The route makes the most sense when:

1. the transaction is genuinely prohibited
2. no existing exemption fits
3. EXPRO is unavailable or inferior
4. the transaction offers material plan value
5. conflicts can be controlled
6. the plan can tolerate public disclosure
7. valuation and independent review can be credible
8. timing allows the administrative process.

If the transaction fails those tests, redesign can be better than exemption.

The existence of an administrative process does not mean every conflicted deal deserves to use it.

A Practical Application File Has Six Layers

1. Legal map

• prohibited provisions
• parties in interest
• class/statutory alternatives
• requested relief.

2. Economic case

• plan benefits
• plan costs
• counterparty benefits
• outside alternatives
• concentration.

3. Independent protection

• QIF selection
• qualifications
• independence
• authority
• written conclusions.

4. Valuation

• appraiser independence
• method
• special value
• transaction-date update.

5. Administrative record

• complete application
• supplements
• public-record review
• interested-person notice
• comments/hearing response.

6. Post-grant controls

• conditions
• monitoring
• material-change supplementation
• QIF events
• Section 404 review.

A good application is a transaction-control system, not just a legal brief.

The ROIStreet Individual Exemption Decision Map

Identify contemplated transaction → map Section 406/407 and Code 4975 issues → test statutory relief → test class exemptions → test EXPRO precedent → if no clean route, quantify value of seeking individual relief → identify applicant and every involved party in interest → describe integrated transaction and chronology → quantify the plan's economic trade-offs → identify counterparty benefits → analyze nonprohibited alternatives → identify every conflict and exact provision requiring relief → select qualified independent fiduciary where needed → document QIF expertise, insurance, independence, economics and authority → obtain qualified independent appraisal where value matters → address strategic/control/assemblage value → confirm appraisal recency and closing-date update → if retroactive, test safeguards-at-entry and no-harm standard → prepare complete Part 2570 application → accept public-record consequences → file with OED → update material facts promptly → if tentative denial, use the 20-day response process → if DOL proposes relief, notify interested persons → address comments and hearing issues → wait for final grant before prospective closing → satisfy every final condition → monitor ongoing obligations → preserve separate Section 404 prudence analysis

The decisive question is not:

"Can DOL make this legal?"

It is:

"Can the plan prove on a public record that this particular prohibited transaction deserves relief because its economics are defensible, its conflicts are controlled and participants are protected?"

Frequently Asked Questions

How does transaction-specific DOL relief work?

An individual exemption is administrative relief granted by DOL under ERISA Section 408(a) and/or the parallel Code authority, limited to the parties and transactions defined in the grant.^[2][4][5]

Is it the same as a class exemption?

No. Class relief is broadly available to anyone within the defined class who satisfies its conditions. An individual exemption is specific to the approved parties and transaction.^[2]

Does every PTE number identify a class exemption?

No. DOL also assigns PTE numbers to individual grants. Current 2026 examples include PTE 2026-01 and PTE 2026-05.^[8][9][10]

When should a 401(k) consider one?

Usually after counsel concludes a contemplated transaction is prohibited and no statutory, class or better EXPRO route fits.

What must DOL find?

The exemption must be administratively feasible, in plan and participant interests, and protective of participant and beneficiary rights.^[2][4]

Does fair market value guarantee relief?

No. Value is only part of the record. DOL also considers the conflict, alternatives, plan economics, counterparty benefits and protective conditions.^[2][3]

What procedure governs new applications?

29 CFR Part 2570 Subpart B as revised effective April 8, 2024.^[2][3]

Must the application disclose nonprohibited alternatives?

Yes. It identifies alternatives considered and explains why they were not pursued.^[2]

Must it identify the exact prohibited provisions?

Yes. The applicant specifies the provisions requiring relief and explains why the transaction implicates them.^[2]

Can an independent fiduciary be economically connected to the sponsor?

Potentially, but independence is based on all facts. Involved-party revenue at or below 2% generally does not compromise independence solely for that reason; above 2% receives closer scrutiny, and the current revenue framework does not permit the conclusion when the figure exceeds 5%.^[2]

Do the same percentages matter for appraisers?

Yes. The current qualified-independent-appraiser definition uses a similar 2% and 5% structure.^[2]

How old can the appraisal be?

Generally no more than one year on the transaction date, with a written update affirming accuracy as of that date.^[2]

Can DOL grant retroactive relief?

Yes, but current procedure subjects it to heightened scrutiny. DOL generally expects prospective-type safeguards to have existed when the transaction occurred and no participant harm.^[2]

Is hiring an independent fiduciary after closing enough?

Not by itself. DOL can consider retrospective review in specified circumstances, but contemporaneous protection is much stronger evidence.^[2]

Are exemption applications public?

Generally yes. The administrative record is open for public inspection from filing, and material pre-submission information can become part of that record.^[1][2]

Can an applicant claim commercial confidentiality?

A nongovernmental applicant that designates submitted application information confidential can stop processing until the claim is withdrawn under the current procedure.^[1][2]

Can the application be filed electronically?

Yes. Current procedure permits electronic filing with OED.^[1][2]

Does DOL promise an answer in 30 days?

No. DOL describes early service goals for assignment and preliminary reaction, not a 30-day final approval deadline.^[1]

What happens after a tentative denial?

For a complete application, the applicant generally has 20 days to request a conference and/or indicate an intent to submit supplemental information.^[2]

Is reconsideration available after final denial?

The rule provides one qualifying reconsideration route, generally within 180 days of final denial and subject to stated grounds.^[2]

Is a proposed exemption effective?

No. A Federal Register proposal begins the public stage. Final relief comes only after DOL evaluates the completed record and publishes a final grant.^[2]

Can participants comment?

Yes. Interested persons receive an opportunity to comment after proposal.^[2][4]

Is a hearing automatic?

No. Hearing rights apply in specified circumstances, and DOL evaluates whether a hearing is needed to resolve material factual issues.^[2]

Can another plan rely on an individual exemption issued to someone else?

No. The other grant can inform a new application but cannot be used as class relief.^[1][2]

What is a recent 401(k) example?

PTE 2026-01 concerns stock rights held by Liberty Latin America's 401(k) plan.^[8][9]

What is a recent related-party real-estate example?

PTE 2026-05 covers a defined Hawai'i Pacific Health Retirement Plan property sale with specific pricing and protective conditions.^[8][10]

Can individual relief address a QPAM disqualification?

Yes. PTE 2026-03 gives specified UBS-related managers conditional relief connected to continued use of PTE 84-14 despite defined disqualifying corporate events.^[8][11]

Can DOL change relief after grant?

Yes. Material changes can lead to prospective modification or revocation under the current procedure.^[2]

What if the qualified independent fiduciary resigns?

The applicant has a 30-day DOL notice obligation for specified QIF resignation, termination or conviction events.^[2]

Is DOL planning another procedural change?

The 2026 Unified Agenda lists RIN 1210-AC42 as a proposed-rule project concerning the exemption procedure.^[14]

Is that proposed change effective now?

No. As of August 28, 2026, the current rule remains the April 8, 2024 Part 2570 procedure.^[1][2][14]

What is the current OMB number?

OMB Control No. 1210-0060, currently scheduled to expire February 28, 2027.^[15]

Does that date end DOL's exemption authority?

No. It is an information-collection approval date, not a sunset of ERISA Section 408(a).^[4][15]

Does a DOL grant prove the transaction is prudent?

No. Prohibited-transaction relief and Section 404 prudence are separate analyses.^[2][6]

Sources & References

1. U.S. Department of Labor — Employee Benefits Security Administration: Individual Exemptions — https://www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/exemptions/individual
2. Legal Information Institute: 29 CFR Part 2570 Subpart B — Procedures Governing Prohibited Transaction Exemption Applications — https://www.law.cornell.edu/cfr/text/29/part-2570/subpart-B
3. U.S. Department of Labor / Federal Register: Procedures Governing the Filing and Processing of Prohibited Transaction Exemption Applications, 89 FR 4662 (January 24, 2024) — https://www.govinfo.gov/content/pkg/FR-2024-01-24/pdf/2024-00586.pdf
4. Legal Information Institute / U.S. Code: 29 U.S.C. §1108 — Exemptions From Prohibited Transactions — https://www.law.cornell.edu/uscode/text/29/1108
5. Legal Information Institute / U.S. Code: 26 U.S.C. §4975 — Tax on Prohibited Transactions — https://www.law.cornell.edu/uscode/text/26/4975
6. Legal Information Institute / U.S. Code: 29 U.S.C. §1104 — Fiduciary Duties — https://www.law.cornell.edu/uscode/text/29/1104
7. Legal Information Institute / U.S. Code: 29 U.S.C. §1106 — Prohibited Transactions — https://www.law.cornell.edu/uscode/text/29/1106
8. U.S. Department of Labor — Employee Benefits Security Administration: 2026 Individual Exemptions — https://www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/exemptions/2026
9. U.S. Department of Labor / Federal Register: PTE 2026-01 — Liberty Latin America 401(k) Savings Plan — https://www.federalregister.gov/documents/2026/02/26/2026-03440/exemption-from-certain-prohibited-transaction-restrictions-involving-liberty-latin-america-ltd
10. U.S. Department of Labor / Federal Register: PTE 2026-05 — Hawai'i Pacific Health and Straub Clinic & Hospital — https://www.federalregister.gov/documents/2026/08/21/2026-17142/exemption-involving-hawaii-pacific-health-and-its-subsidiary-straub-clinic-and-hospital-located-in
11. U.S. Department of Labor — Employee Benefits Security Administration: PTE 2026-03 — UBS AG QPAM Relief — https://www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/exemptions/2026
12. U.S. Department of Labor — Employee Benefits Security Administration: EXPRO Authorizations under PTE 96-62 — https://www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/exemptions/expro-exemptions-under-pte-96-62
13. U.S. Department of Labor — Employee Benefits Security Administration: Voluntary Fiduciary Correction Program — https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/correction-programs/vfcp
14. Office of Information and Regulatory Affairs: 2026 Unified Agenda — Amendment to Prohibited Transaction Exemption Procedures, RIN 1210-AC42 — https://www.reginfo.gov/public/do/eAgendaViewRule?RIN=1210-AC42&operation=OPERATION_PRINT_RULE&pubId=202510
15. U.S. Department of Labor / Federal Register: Agency Information Collection Activities — Exemption Application Procedure, OMB Control No. 1210-0060, 91 FR 53657 (August 19, 2026) — https://www.govinfo.gov/content/pkg/FR-2026-08-19/pdf/2026-16880.pdf

Educational Disclaimer

ROIStreet publishes educational content about 401(k) fiduciary duties, ERISA prohibited transactions and Department of Labor exemption procedures. This article is not legal, fiduciary, tax, investment, valuation, securities, bankruptcy, regulatory or plan-administration advice. Individual exemptions are highly fact-specific and depend on the exact prohibited provisions, parties in interest, transaction economics, alternatives, conflicts, independent-fiduciary structure, valuation, participant impact, application record, public comments, DOL findings and final conditions. A prior individual exemption is not authority for another plan to transact. Retroactive relief should never be assumed. The 2026 Unified Agenda contains a proposed-rule project that may change Part 2570, so current primary authority should be checked before filing. A DOL exemption does not establish that a transaction is prudent under ERISA Section 404.

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