Summary:
This issuance is intended to notify FDIC-supervised institutions of an amendment of the U.S. Department of Labor’s (DOL) Prohibited Transaction Class Exemption rule (PTE 84-14) for Qualified Professional Asset Manager (QPAM) exemptions. The QPAM Exemption (hereafter, PTE 84-14) provides broad relief for employee benefit plan and individual retirement account transactions that would otherwise be prohibited by 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, as long as the transactions involve a QPAM. Under the prior rule, QPAMs did not need to notify the DOL that they were relying on the Exemption. However, under the newly amended rule, a one-time notice is now required in order to continue to rely on the Exemption, provided certain conditions are met.
Statement of Applicability: The contents of, and material referenced in, this FIL apply to all FDIC-supervised financial institutions.
Highlights:
The revised DOL QPAM Exemption PTE 84-14 was published in the Federal Register on April 3, 20241 and became effective June 17, 2024. Among other things, PTE 84-14 will require institutions relying on the exemption to:
- Notify DOL of their intent to rely upon the Exemption. Each QPAM that relies upon the Exemption must report its legal name (and any name the QPAM may be operating under) by email to the DOL at QPAM@dol.gov within an initial 90-day period from the date the Exemption became effective, with an additional 90-day period to cure inadvertent failures to report;
- Meet the adjusted QPAM asset management and equity thresholds, which will phase in through incremental changes in 2024, 2027, and 2030;
- Become familiar with Section I(g)(3)’s expanded list of types of misconduct and entities that may cause ineligibility for the QPAM exemption;
- Comply with the new recordkeeping requirements in PTE 84-14 section VI(u), which would require maintaining records for six years demonstrating compliance with this exemption; and
- Request any individual exemptions in case a bank becomes ineligible or anticipates becoming ineligible under the new PTE 84-14 section I(k).
Compliance Date
Generally, banks will have until September 15, 2024, to notify DOL of their intent to rely upon the Exemption; see the exemption amendment to PTE 84-14 for additional information.
This is a non-exhaustive list of the changes made by DOL to the Exemption, and institutions should carefully review the final DOL rule independently in order to ensure they maintain their QPAM exempt status.
- 1
See Amendment to Prohibited Transaction Class Exemption 84-14 for Transactions Determined by Independent Qualified Professional Asset Managers (the QPAM Exemption), 89 Federal Reg. 23090 (April 3, 2024).