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DOL Issues Final Amendment to Qualified Professional Asset Manager (QPAM) Exemption

Apr 2, 2024, 05:00 by Anne Newhouse
The U.S. Department of Labor (DOL) issued a technical correction to the final amendment to class prohibited transaction exemption (PTE) 84-14 (the QPAM Exemption), which was published in the Federal Register on April 3, 2024. The QPAM Exemption provides relief from certain prohibited transaction restrictions of Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA) and Title II of ERISA, as codified in the Internal Revenue Code of 1986, as amended. 

The corrections in the document fix a typographical error and make a minor clarification to a provision to reflect the Department’s original intent for the effect of the amendment. The technical corrections are consistent with the amended exemption's intended scope and the analysis and data relied upon in DOL's final regulatory impact analysis (RIA). 

The technical correction is issued on August 13, 2024 without further action or notice. Exemption Date: The PTE 84-14 amendment, as corrected herein, is effective on June 17, 2024.

(Updated August 12, 2024)

The U.S. Department of Labor's (DOL) Employee Benefits Security Administration (EBSA) issued a final amendment to the class prohibited transaction exemption 84-14, known as the Qualified Professional Asset Manager (QPAM) exemption. The exemption permits various parties related to employee benefit plans and individual retirement accounts (IRAs) to engage in transactions involving plan and IRA assets.

The amendment responds to substantial changes in the financial services industry since the exemption’s 1984 establishment. These changes include industry consolidation and the increasing global reach of financial services institutions in their affiliations and investment strategies for both plan and IRA assets.

The final amendment ensures that the exemption continues to protect plans and their participants and beneficiaries and IRA owners by doing the following:

  • Addressing perceived ambiguity by clarifying that foreign convictions are included in the scope of the exemption’s ineligibility provision.
  • Expanding the ineligibility provision to include additional types of serious misconduct.
  • Adding a one-year transition period that focuses on mitigating potential costs and disruption to plans and IRA owners when a QPAM becomes ineligible due to a conviction or participates in other serious misconduct.
  • Updating asset management and equity thresholds in the QPAM definition.
  • Clarifying the requisite independence and control a QPAM must have with respect to investment decisions and transactions.
  • Adding a standard recordkeeping requirement.

The amendment is effective June 17, 2024.

DOL News Release

(Posted April 3, 2024)

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