Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
By Sean Forbes
Oct. 1 — Credit Suisse AG's retirement plan assets managers can continue to advise plans despite the bank's criminal conviction on conspiracy to violate U.S. tax laws, the Department of Labor said in a notice.
Qualified professional assets managers (QPAMs) associated with the Zurich-based bank will be able to take advantage of Prohibited Transaction Exemption 2015-14 “to engage in arm's length transactions with parties in interest with respect to the plans they manage that would otherwise be prohibited,” the DOL said in its notice, released Oct. 1.
QPAMs are large regulated banks, savings and loan associations, insurance companies or federally registered investment advisers that meet certain standards of size and independence.
The exemption is effective from Nov. 18, 2015, the first date following the last day of temporary relief provided under PTE 2014-11, through Nov. 20, 2019.
“As with all such exemptions, there are safeguards in place to protect retirement plans and IRAs,” a DOL spokesman told Bloomberg BNA on Oct. 1.. “For instance, part of this action covers only five of the ten years from which Credit Suisse affiliated asset managers would otherwise be barred from accessing the QPAM class exemption. If those asset managers want to continue doing so after five years, they will need to seek a new exemption from the department,” he said.
A spokesman for Credit Suisse told Bloomberg BNA that the company was grateful for the exemption. “We are pleased that the Department of Labor has granted our QPAM exemption following a rigorous evaluation process, and we look forward to continuing to work on our clients’ behalf,” said Justin G. Perras, head of communications for Credit Suisse Asset Management, in New York.
The DOL's exemption means that Credit Suisse can rely on a previous class exemption, PTE 84-14, which includes a provision stating that once an entity is convicted of specified crimes, the related QPAMs lose the ability to rely on the class exemption for 10 years following the conviction date, absent an individual exemption.
The exemption for Credit Suisse follows a pattern of carefully crafted exemptions over the past year for other major banks that have been convicted of violating laws of the U.S. or other countries.
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