09.07.22
DOL Extends Comment Time, Plans Hearing on Retirement Plan Transactions
by: Tracey Longo
The U.S. Department of Labor (DOL) is allowing more comment time and holding an online hearing on a proposal that could affect investment managers’ ability to work with retirement plans. The amendment deals with the legal status of investment managers handling retirement money to perform sometimes necessary transactions with certain parties—dealings that would otherwise be prohibited by the Employee Retirement Income Security Act because of a perceived conflict of interest. The Prohibited Transaction Class Exemption 84-14 (also known as the QPAM exemption) allows investment funds holding assets of plans and individual retirement accounts to engage in transactions with disqualified persons or “parties in interest.” To currently qualify for QPAM status, a registered investment advisor needs to have $1 million in shareholder or partner equity and $85 million in assets under management at the end of its taxable year. The DOL proposal would increase the equity threshold to $2,040,000. The proposal would also increase the assets under management threshold to $135,870,000. In addition, the DOL has proposed that such threshold amounts be updated on January 31 each year for inflation.
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