Hawai'i Health Plan Scores ERISA Property Sale Exemption
Published Date: 8/21/2026
Notice
Summary
This exemption permits the Hawai[revaps]i Pacific Health Retirement Plan (the Plan) to sell property (the Property) to Straub Clinic & Hospital (Straub) for the greater of $16,247,000 or 110% of the Appraised Value of the Property as of the date of the sale (the Sale). Absent this exemption, the Sale would violate certain prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974 (ERISA) and/or the Internal Revenue Code of 1986 (the Code).
Analyzed Economic Effects
5 provisions identified: 5 benefits, 0 costs, 0 mixed.
Plan must receive minimum sale price
The Hawai'i Pacific Health Retirement Plan may sell the property to Straub for the greater of $16,247,000 or 110% of the Property's Appraised Value as of the date of the Sale. The exemption is effective August 21, 2026 and requires the Sale to be a lump-sum cash payment equal to that Purchase Price.
Repayment of past property expenses required
Before the Sale, Straub or Hawai'i Pacific Health must repay the Property Expenses that the Plan erroneously paid from 2006 through 2014 (including lost interest), and Straub or Hawai'i Pacific Health must pay the IRS any legally required excise tax for prohibited transactions from 2006 through 2022. The QIF must confirm repayment in writing prior to approving the Sale.
Qualified Independent Fiduciary must oversee sale
A Qualified Independent Fiduciary (initially Central Pacific Bank) must have sole authority to approve and monitor the Sale, hire a Qualified Independent Appraiser, negotiate price increases if needed, and confirm the Sale is prudent and in the Plan's best interest. If the QIF is replaced, the Department must approve the replacement in writing at least 90 days before the Sale.
Plan cannot bear sale transaction costs
The Plan is not allowed to pay any costs associated with the Sale, including brokerage commissions, fees, appraisal costs, or other expenses. Those costs must not reduce the Purchase Price delivered to the Plan.
Participant access to sale records for six years
Straub and Hawai'i Pacific Health must keep records related to the Sale for six years and make them available during normal business hours to, among others, any participant or beneficiary of the Plan or their authorized representative. The QIF must also deliver a written report to the Department within 60 days after the Sale confirming whether exemption conditions were met.
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