Dechert Testifies Before Department of Labor on Proposed QPAM Exemption Amendments; Supplemental Comment Period in Effect

Prohibited Transaction Class Exemption 84-14 (the “QPAM Exemption”) currently serves as one of the most - if not the most - utilized exemptions available to investment managers for employee benefit plans (and entities in which they invest) that are subject to under the Employee Retirement Income Security Act of 1974 (including the corresponding provisions of the tax code, “ERISA”). Absent the availability of prohibited transaction relief such as the QPAM Exemption, many transactions effected by investment managers on behalf of plans (and “plan assets” entities) could be prohibited under ERISA. While there are other prohibited transaction exemptions, the QPAM Exemption offers particularly broad relief that is not limited to the type of transaction in question or type of investment structure being used to make the investment.

On July 27, 2022, the U.S. Department of Labor (the “DOL”) made a proposal to make significant changes to the QPAM Exemption (the “Proposal”), and, on October 10, 2022, Dechert submitted a comment letter regarding the Proposal. In connection with that submission, Dechert partners Andrew L. Oringer and Steven W. Rabitz last month, on November 17, 2022, testified at the DOL hearing on the Proposal. Our OnPoint regarding our comment letter, together with the comment letter itself, may be found here, and a full transcript of our testimony is available here. The DOL’s publication of the transcript on or about December 12, 2022 triggered a new comment period that the DOL has stated will extend for “approximately” 14 days, for those still interested in commenting.

If you would like to discuss the Proposal, our comment letter or anything else relating to QPAMs or the fiduciary provisions of ERISA, please contact any Dechert attorney listed below or any Dechert attorney with whom you regularly work.