Proposed Regulation Relating to the Definition of Adequate Consideration, 53 FR 17632

Summary

SUMMARY: This document contains a notice of a proposed regulation under the Employee Retirement Income Security Act of 1974 (the Act or ERISA) and the Federal Employees' Retirement System Act of 1986 (FERSA). The proposal clarifies the definition of the term "adequate consideration" provided in section 3(18)(B) of the Act and section 8477(a)(2)(B) of FERSA for assets other than securities for which there is a generally recognized market. Section 3(18)(B) and section 8477(a)(2)(B) provide that the term "adequate consideration" for such assets means the fair market value of the asset as determined in good faith by the trustee or named fiduciary (or, in the case of FERSA, a fiduciary) pursuant to the terms of the plan and in accordance with regulations promulgated by the Secretary of Labor. Because valuation questions of this nature arise in a variety of contexts, the Department is proposing this regulation in order to provide the certainty necessary for plan fiduciaries to fulfill their ...