US Labor Department adopts amendment to class exemption involving qualified professional asset managers

WASHINGTON — The U.S. Department of Labor's Employee Benefits Security Administration today adopted a final amendment that allows qualified professional asset managers to act as QPAMs for their own employee benefit plans provided certain additional conditions are met.

"We have updated the exemption to expand the investment opportunities available to plans sponsored by QPAMs while protecting the plans' assets," said Phyllis C. Borzi, assistant secretary of labor for EBSA.

Prohibited Transaction Exemption 84-14 allows plans whose assets are managed by a QPAM to engage in a variety of transactions otherwise prohibited by the Employee Retirement Income Security Act of 1974, as amended, provided that certain safeguards have been met. Banks, insurance companies, savings and loan associations, and investment advisors who meet certain regulatory and financial standards are eligible to serve as QPAMs.

With respect to a QPAM managing the assets of a plan it sponsors, the class exemption requires that, among other things:

• The QPAM adopts policies and procedures designed to assure compliance with the conditions of PTE 84-14.
• An independent auditor conducts an annual exemption audit, which is designed to ensure that the conditions of the class exemption have been met.

The final amendment is published in today's edition of the Federal Register.