Contact Nicholas Schroth of the Department at (202) 693-8571
OR
Attention: Application No. D-12098,
via email to [email protected]
Comments will be published here: https://www.regulations.gov/document/EBSA-2024-0007-0001/comment
* What is a QPAM exemption? It’s a special waiver from certain prohibited transaction restrictions under ERISA and the Internal Revenue Code. This allows qualified asset managers, like UBS, to manage retirement funds.
* Why is UBS seeking an exemption? Due to prior convictions of entities under its umbrella, UBS is technically ineligible for the QPAM exemption. They need this exemption to continue managing certain retirement assets.
* What are the concerns? * UBS failed to comply with a prior exemption, PTE 2023-14, specifically by not completing a required audit. The Department of Labor is now considering granting retroactive relief for this period, which has sparked debate. * There’s significant public pushback against granting UBS another exemption. The QPAM Coalition points to UBS’s history of fraud and potential criminal offenses as reasons for denying the request. They argue that UBS hasn’t earned this privilege. * SIFMA, a financial industry group, has concerns about the broader implications of the exemption for the market.
* Key arguments from our previous discussion: * ERIC supports the proposal, emphasizing the potential negative impact on plan participants if transactions are retroactively disqualified. * The QPAM Coalition strongly opposes the proposal, citing UBS’s history and arguing for stronger regulation of QPAM exemptions. * Many commenters voiced concerns about transparency, due process, and the impact on plan expenses, highlighting the complexity of the issue.
* What happens next? The Department of Labor is accepting public comments on the proposal until July 15, 2024. These comments will be crucial in determining whether UBS is granted the QPAM exemption and whether retroactive relief is applied. This episode emphasizes the tension between protecting retirement funds and holding financial institutions accountable for past misconduct.
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