The Department of Labor (the Department) has the authority, pursuant to section 408(a) of the Employee Retirement Income Security Act of 1974 (ERISA) and section 4975(c)(2) of the Internal Revenue Code of 1986 (the Code), to grant an exemption from all or part of the restrictions imposed, respectively, by sections 406 and 407(a) of ERISA and from taxes imposed by sections 4975(a) and (b) of the Code by reason of section 4975(c)(1)(A) through (F) of the Code.
On March 13, 1984, the Department granted PTE 84-14 (49 FR 9494), a class exemption that permits various parties who are related to employee benefit plans to engage in transactions involving plan assets if, among other conditions, the assets are managed by a Âqualified professional asset manager (QPAM). The Department recently amended the QPAM exemption. The QPAM exemption granted in 1984 did not provide relief for transactions involving the assets of plans managed by an in-house asset manager.
The Committee on Investment of Employee Benefit Assets (CIEBA) subsequently requested such relief. In CIEBAÂs original exemption application, CIEBA stated that many large companies manage some or all of their plan assets in-house. These large corporations determined that they could reduce costs and maintain high quality management by developing an in-house asset management capability rather than relying exclusively on outside managers or consultants. CIEBA represented that, unless the Department provided broad exemptive relief for in-house asset managers, in-house plans would be disadvantaged because of the restrictions on the types of transactions an in-house manager could engage in on behalf of such a plan.
On April 10, 1996, the Department granted PTE 96-23 (61 FR 15975-01), Class Exemption for Plan Asset Transactions Determined by In-House Asset Managers. The class exemption permits various parties in interest to employee benefit plans to engage in transactions involving plan assets if, among other requirements, the assets are managed by an in-house asset manager (INHAM).
In order to grant an exemption under section 408(a) of ERISA and section 4975(c)(2) of the Code, the Department must determine that the exemption is administratively feasible, in the interests of the plan and its participants and beneficiaries, and protective of the rights of the participants and beneficiaries of such plan. In order to protect the participants and beneficiaries of plans managed by INHAMs, the Department has proposed to amend PTE 96-23 to include specific policy and procedures and audit requirements as conditions to the exemption. These new information collections are designed to safeguard plans involved in transactions covered by the exemption.
US Code:
29 USC 1108
Name of Law: Employee Retirement Income Security Act of 1974
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
PTE96-23ProposedAmendment.pdf
INHAM Amendment - Supporting Statement (final)- 06-16-10.doc
Proposed Amendment to PTE 96-23 -- Audit Requirement