EBSA Finalizes 2003 QPAM Rules

An EBSA news release said the amendments given final adoption Monday, Prohibited Transaction Exemption 84-14, update financial standards and streamline recordkeeping requirements of a widely used class exemption available for plans whose assets are managed by qualified professional asset managers (QPAMs).  

“We have updated the exemption to increase the investment opportunities available to plans, allow greater efficiencies and lower costs,” said Ann Combs, assistant secretary of EBSA.   “The revised rules will eliminate unnecessary barriers to plan investments in the financial marketplace.”

The department proposed the amendments in 2003 (See  DoL Suggests QPAM Rule Changes).  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 (ERISA), as long as certain safeguards are met.   Banks, insurance companies, savings and loans and investment advisors who are regulated by appropriate state or federal laws and meet certain financial standards are eligible to serve as QPAMs, under the exemption.

A separate amendment also was proposed that would allow in-house QPAMs to manage the assets of their own plans subject to additional safeguards to protect workers’ benefits, the news release said.

The final amendments and proposed amendment to PTE 84-14 will be published in the Federal Register on Tuesday.