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Archived News Release--Caution:
information may be out of date.
For more information call: (202) 219-8921
In-house managers of large corporate pension plans can
readily take advantage of more investment opportunities under a class exemption
granted today by the U. S. Department of Labor.
Currently, when in-house managers want to make a
transaction prohibited by the Employee Retirement Income Security Act (ERISA),
they must either seek an individual exemption from the department, hire a
qualified professional asset manager or forgo the investment opportunity.
Olena Berg, assistant secretary of labor for the Pension
and Welfare Benefits Administration said, "This action opens the door for large
plans to pursue beneficial investment opportunities without seeking the
department's prior approval."
The department received a number of recommendations from
the employee benefit community which helped shape the final exemption. A number
fiduciary audit issues were clarified, including the role of the auditor, the
content of the written policies and procedures that must be adopted by the
in-house manager and the scope of the audit.
Under the general exemption, plans managed by in-house
managers can engage in a variety of transactions with service providers if
certain conditions are met. Only large employers whose plans have at least $250
million in assets, with $50 million under direct in-house management can use
the exemption. It also requires that in-house managers be registered investment
advisers and make all decisions concerning the affected transactions.
The special exemptions on leasing office or commercial
space, leasing residential space to employees and the use of public
accommodations owned by plans were adopted without modification.
The final exemption is scheduled to be published in the
Wednesday, April 10 Federal Register.
Archived News Release--Caution:
information may be out of date.
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