Compliance August 22, 2005

EBSA Finalizes 2003 QPAM Rules

August 22, 2005 (PLANSPONSOR.com) - The Employee Benefits Security Administration (EBSA) of the US Department of Labor has issued final approval of amendments to prohibited transaction rules outlining the roles of qualified professional asset managers (QPAMs).
Reported by

An EBSA news release said the amendments given final adoption Monday, Prohibited Transaction Exemption 84-14, update financial standards and streamline recordkeeping requirements of a widely used class exemption available for plans whose assets are managed by qualified professional asset managers (QPAMs).  

“We have updated the exemption to increase the investment opportunities available to plans, allow greater efficiencies and lower costs,” said Ann Combs, assistant secretary of EBSA.   “The revised rules will eliminate unnecessary barriers to plan investments in the financial marketplace.”

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

The department proposed the amendments in 2003 (See  DoL Suggests QPAM Rule Changes).  Prohibited Transaction Exemption 84-14 allows plans whose assets are managed by a QPAM to engage in a variety of transactions otherwise prohibited by the Employee Retirement Income Security Act (ERISA), as long as certain safeguards are met.   Banks, insurance companies, savings and loans and investment advisors who are regulated by appropriate state or federal laws and meet certain financial standards are eligible to serve as QPAMs, under the exemption.

A separate amendment also was proposed that would allow in-house QPAMs to manage the assets of their own plans subject to additional safeguards to protect workers’ benefits, the news release said.

The final amendments and proposed amendment to PTE 84-14 will be published in the Federal Register on Tuesday.  

Compliance August 19, 2005

PBGC Assumes $286M In Pension Liability from Westpoint Stevens

August 19, 2005 (PLANSPONSOR.com) - The list of ailing pension plans seeking the shelter of the nation's private-sector pension insurer continued apace Friday.
Reported by

The Pension Benefit Guaranty Corporation (PBGC) said it was taking over responsibility for the pension plans covering 32,500 hourly and salaried workers of Westpoint Stevens Corp, a bankruptWest Point, Georgia textile manufacturer. According to  the PBGC statement , the plans were just 46% funded.  The agency said it would assume liability for $286 million of the company’s $306 million pension shortage.   The PBGC said the plans terminated August 8 and that it had formally taken them over on Thursday.
 

Westpoint Stevens filed for Chapter 11 bankruptcy protection on June 1, 2003, and its operating assets were sold to a group led by financier Carl Icahn in a sale that closed on August 8, 2005.  Under the terms of the sale, the asset purchaser will not assume the underfunded pension plans.

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

Within the next several weeks, the PBGC will send trusteeship notification letters to all Westpoint Stevens pension plan participants. Workers and retirees with questions may consult the PBGC Web site,  www.pbgc.gov/plans or call toll-free at 1-800-400-7242. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask for 800-400-7242.

«