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 qualified
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 CIEBAs 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