For those who missed "Financial Firms as ERISA Plan Sponsors: The When, What and How of the QPAM Audit Requirement" on May 1, 2013, click to learn more about the Qualified Plan Asset Manager exemption and what it means to asset managers. Slides from this webinar — featuring ERISA attorney Howard Pianko (Seyfarth Shaw LLP), ERISA attorney Mary Alcock (Clearly Gottlieb Steen & Hamilton LLP) and Dr. Susan Mangiero (Fiduciary Leadership, LLC) - can be helpful to anyone seeking to stay abreast of current news about QPAM status scrutiny.

In "DOL feeling heat on QPAM exemptions" (January 26, 2015), Pensions & Investments reporter Hazel Bradford explains that the U.S. Department of Labor "is under increasing pressure to get tough on money managers with U.S. retirement plan clients when their firm, or an affiliate, gets into legal trouble." Far from being a theoretical construct, Credit Suisse Asset Management stands to lose revenue if it cannot maintain its QPAM status for more than $2 billion of ERISA assets. A November 14, 2014 DOL press release announced a January 15, 2015 hearing about whether a temporary grant of QPAM status should be revoked or made permanent "after Credit Suisse's guilty plea to one count of conspiracy to engage in tax fraud..." See "Testimony to be heard on the status of related firms and affiliates as Qualified Professional Asset Managers."

Ahead of the meeting, a letter was sent to the DOL on U.S. House of Representatives, Committee on Financial Services letterhead, urging this retirement plan regulator to "consider adding a prospective employee restriction banning Credit Suisse QPAMs from hiring any employees who have been or who subsequently may be identified by Credit Suisse (CS) or any U.S. or non-U.S. regulatory or enforcement agencies as having been responsible for the criminal conduct in any capacity." Click here to read the full letter. Wall Street Journal reporter John Letzing writes that a bank spokesperson describes the issues as having occurred in the distant past and "has worked hard to uphold the highest standards in the industry, and where we have fallen short, we have accepted responsibility and have addressed the issues." See "Credit Suisse's 'Too Big to Bar' Hearing Slated for Tomorrow" (January 14, 2015). In granting a temporary waiver a few months ago, the DOL expressed a desire to "avert possible disruptions in retirement plan investments that would be detrimental to the financial well-being of individuals saving for retirement, or pensions."

In my experience as someone who has co-created a QPAM audit product, some asset managers seem to have taken the path of most resistance and quickly shut down discussions as a way to avoid someone taking a close look at practices. Others with whom I have spoken about the QPAM audit are focused on full compliance. Given the variability in QPAM awareness, it might be extremely helpful to have QPAM audit results made public. Not only could ERISA plan participants review the results but investment fiduciaries could examine the audit reports as part of their due diligence, both prior to hiring an asset manager and then regularly thereafter.

Whatever happens, most people seem to agree that the QPAM exemption-granting process is important but complex. As a senior legal ERISA professional, Howard Pianko has it right when it says that "The DOL is facing a difficult decision."