Expanded Abandoned Plan Program Gives Certain Bankruptcy Trustees QTA Eligibility, Adopts Other Technical Changes

On May 17, 2024, the Department of Labor ("DOL") published interim final rules (collectively, the "IFR") to amend DOL's 2006 regulations establishing the abandoned plan program, as well as the accompanying prohibited transaction exemption. The IFR expands eligibility to serve as a "qualified termination administrator" ("QTA") to include Chapter 7 bankruptcy trustees and certain parties appointed by such trustees ("Eligible Designees"). Beyond expanding QTA eligibility, the IFR also makes a number of technical changes which may impact the administration of abandoned plans.

The IFR is effective July 16, 2024. DOL has also requested industry comments by that date.

Background

DOL's abandoned plan program was established in 2006 upon its issuance of a set of regulations that provide the criteria for when a plan is considered "abandoned," eligibility rules for QTAs, procedures for terminating abandoned plans, as well as a fiduciary safe harbor for QTAs to wind up