Compliance March 31, 2011

ERISA Class Exemption Change for INHAMs Released

Federal regulators have released a final amendment to Prohibited Transaction Exemption 96-23 that broadens transactions allowed for employee benefit plans whose assets are managed by in-house asset managers (INHAMs).
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The exemption, released by the U.S Department of Labor’s Employee Benefits Security Administration (EBSA), also imposes conditions to protect plans and their assets.

PTE 96-23 is a class exemption under the Employee Retirement Income Security Act (ERISA) that allows in-house managers of large employee benefit plans to engage in a wide range of transactions with related parties.  According to EBSA, the exemption imposes conditions to protect plans and their assets, including:  a limitation on the types of parties that may engage in transactions with the INHAM; the adoption by the INHAM of policies and procedures designed to assure compliance with the conditions of the exemption; and the engagement of an independent auditor to conduct an exemption audit on an annual basis and the issuance by the auditor of a written report with specific findings regarding the INHAM’s level of compliance with the class exemption.  

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The final amendment to PTE 96-23 includes four parts:

  • The general exemption that allows the portion of a plan that is managed by an INHAM to engage in transactions with virtually all party in interest service providers except the INHAM or a person related to the INHAM.
  • Limited relief for certain transactions involving employers and their affiliates who cannot qualify for the general exemption, including relief for the lease of office or commercial space between the plan and the sponsoring employer.
  • Definition of certain terms used in the exemption. 
  • The effective date of the changes adopted under the amendment.

The final amendment expands the general exemption to include relief for joint venturers in a company that is majority owned by the employer.  The amendment also expands relief for the leasing of office or commercial space to an employer. 

The final amendment to PTE 96-23 is to be published in the Federal Register  on Friday.  

Deals & People March 31, 2011

Howard University Selects ING as a 403(b) Provider

ING’s U.S. Retirement Services announced that it has been selected as the service provider for the Howard University & Howard University Hospital Savings Plan.
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Howard University and Howard University Hospital employ approximately 6,700 individuals. The savings program, which consists of a 403(b) and a 457 plan, has over $750 million in assets under management.   

Educators and staff at the university will have access to ING’s local representatives, who are available for in-person meetings on a group or individual basis.  Employees will also be able to leverage ING’s financial literacy and planning resources to help them determine if they’re on track to reach their financial objectives in retirement.    

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“We are pleased to welcome ING as a new provider in our 403(b) and 457 savings program.  Beyond excellent local representatives and a breadth of tools and services, we selected ING for its culturally relevant approach to financial education, strong commitment to the HBCU community and consistent track record of supporting issues that impact urban communities,” said Jimmy Jones from the Howard University Office of Talent Management.

ING serves education employers and customers in all 50 states, with offices and representatives in the local communities where it does business.  ING is also a provider for 15 government-sponsored retirement plans offered to state university systems.

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