What is QPAM Exemption?

The QPAM Exemption (Prohibited Transaction Class Exemption 84-14) is a status-based class exemption that enables qualifying registered investment advisers, banks, savings and loan associations, and insurance companies to engage in a wide range of transactions with parties in interest.

What does it mean to be a QPAM?

A qualified professional asset manager (QPAM) is a registered investment advisor (RIA) that assists various institutions in making financial investments. The focus of a QPAM is on retirement accounts, such as pension plans.

What is pte 84-14?

PTCE 84-14 is the main class exemption relied upon by investment advisers and managers to conduct business on behalf of a plan or IRA. Although it does not eliminate all investment restrictions, meeting the QPAM requirements substantially reduces the number of restrictions.

What is an ERISA asset?

The general rule is that employer assets used to pay for benefits under an ERISA welfare benefit plan become plan assets if the plan acquires an interest in the assets based on “ordinary notions of property rights” (DOL. Adv.

What is a prohibited transaction exemption?

Prohibited Transaction Exemption (PTE) — a ruling by the Department of Labor (DOL) based on specific facts and circumstances that a transaction is allowable under Employee Retirement Income Security Act (ERISA) regulations. Required by pure captives insuring shareholders’ employee benefit risks.

What is the difference between ERISA and non ERISA?

An ERISA plan is one you will contribute to as an employer, matching participants’ inputs. ERISA plans must follow the rules of the Employee Retirement Income Security Act, from which the plan earned its name. Non-ERISA plans do not involve employer contributions and do not need to follow the stipulations of the Act.

What falls under ERISA?

What Does ERISA Cover? Plans that are covered under ERISA include employer-sponsored retirement plans, such as 401(k)s, pensions, deferred compensation plans, and profit-sharing plans. ERISA also covers certain non-retirement plans like HMOs, FSAs, disability insurance, and life insurance.

What are party-in-interest transactions?

Party-in-Interest Transactions — otherwise legitimate transactions that are prohibited under the Employee Retirement Income Security Act (ERISA). The Act defines a party-in-interest as any fiduciary, legal counsel, employee of an employer-sponsored benefit plan, or service provider to the plan.

What is the Prohibited transaction Exemption 2020-02?

On December 18, 2020, the United States Department of Labor (the DOL) adopted Prohibited Transaction Exemption 2020-02, Improving Investment Advice for Workers & Retirees (PTE 2020-02 or the Exemption), a new prohibited transaction exemption under Title I of the Employee Retirement Income Security Act of 1974 (ERISA).

How do I know if my company is subject to ERISA?

ERISA applies to private-sector companies that offer pension plans to employees. This includes businesses that: Are structured as partnerships, proprietorships, LLCs, S-corporations and C-corporations. No matter how your employer has structured his or her business, it is covered by ERISA if it is a private entity.

What is the QPAM exemption and who needs it?

The QPAM exemption is widely used by parties who conduct transactions with accounts holding retirement plan funds.

Can a QPAM represent a pension plan in a private placement?

However, such transactions cannot be entered into with the QPAM itself or with those parties that may have the power to influence the QPAM. One big role for QPAMs is representing pension plans when they want to engage in private placements. The QPAMs role is to vet the private placement for the pension fund.

What is a ‘qualified professional asset manager’ (QPAM)?

What is a ‘Qualified Professional Asset Manager – QPAM’. A qualified professional asset manager is a registered investment advisor that helps institutions like pension funds make investments. The criteria for qualifying as a QPAM are defined by the Employee Retirement Income Security Act (ERISA).

What is a QPAM and how does it impact ERISA?

ERISA prohibits certain transactions when an ERISA governed plan or fund transacts business with an entity that may be conflicted in regards to that plan or fund. When a QPAM is in the equation, the restriction is lifted with practically all parties, such as plan sponsors and plan fiduciaries.