Special Permission for Operating Engineers' Training Fund Loans

You might care about this because the Department of Labor recently approved a special request that lets a union local lend money to its own training fund. This approval is called an exemption. Specifically, the International Union of Operating Engineers Local Union 627 in Oklahoma City wanted to lend money to its Training Fund. The purpose of these loans is for the Training Fund to buy expensive heavy machinery. This machinery is needed for the apprenticeship training programs. Normally, laws like the Employee Retirement Income Security Act of 1974, known as ERISA, would not allow this kind of transaction. These laws are in place to prevent conflicts of interest and protect the money in employee benefit plans. The Department of Labor looked at the union's request very carefully. They decided that these specific loans would actually be good for the Training Fund and its members. This is because certain protections were put in place. For example, an independent person would oversee the loans. The interest rate on the loans would be fair and favorable to the Training Fund. Also, if the Training Fund ever had trouble paying back a loan, the union could only take back the machinery, not go after other assets of the fund. The Department believes these conditions make the loans safe. They also believe the loans are helpful for the training program. This means the workers who benefit from this training will continue to get the skills they need. The decision was published on February 26, 2026. What makes this particular decision interesting is that it deals with a type of transaction that is usually forbidden by law. ERISA has strict rules to keep employee benefit plans, like this training fund, separate from other related organizations, such as the union that sponsors them. This is to avoid any situations where a union might benefit at the expense of its members' training fund. However, the Department of Labor has the power to grant individual exemptions if they find a transaction is safe and beneficial for the plan members. In this case, the Department concluded that because of the strong safeguards proposed, the loans would not cause harm. These safeguards include an independent fiduciary making decisions for the training fund, and very specific loan terms. The interest rate for the loans is set to be favorable to the training fund. Also, the union's ability to recover its money if the fund defaults is limited only to the heavy machinery bought with the loan. This exemption shows that while general rules exist, there's also flexibility for arrangements that truly serve the plan's best interests under careful watch. People who would find this legal document especially relevant include those involved with union-sponsored training programs or employee benefit plans. This includes union officials, plan administrators, and especially plan fiduciaries. Anyone working in the legal field who specializes in ERISA law or employee benefits will also find this case useful. It provides a real-world example of how the Department of Labor applies its rules for prohibited transactions and when it grants exemptions. Vocational training centers that rely on large equipment for their programs might also be interested. Lastly, members of the International Union of Operating Engineers Local Union 627, or similar unions, would want to know how their training funds are managed and secured. This decision directly impacts how their apprenticeship programs can get the necessary equipment.