Plan fiduciary for orphan plans requiring multiple areas of service and expertise

Independent Auditor

ERISA requires an independent auditor to ensure compliance with certain statutory, class and individual prohibited transaction exemptions to permit specified transactions to occur without liability under ERISA or the imposition of excise tax under the Internal Revenue Code.

ERISA Section 408(g), which provides exemptive relief for investment advice provided by a “fiduciary adviser,” requires that an independent auditor certifies on an annual basis that the terms of the statutory exemption are satisfied.

For financial institutions that manage their own defined benefit retirement plans as a “qualified professional asset manager” or “QPAM,” the Department of Labor requires under ERISA Prohibited Transaction Class Exemption 84-14 (the “QPAM Exemption”) and under Prohibited Transaction Class Exemption 96-23 (the “INHAM Exemption”) that an independent auditor certify that the terms of the exemption are satisfied.

Finally, for financial institutions whose affiliates may have been convicted of a crime that disqualifies them from relying on the QPAM Exemption for most standard investment transactions for their clients, the Department of Labor has granted individual exemptions that permit those financial institutions to continue relying on QPAM for their third-party client transactions, so long as an independent auditor audits the ERISA policies, procedures and training that the financial institution puts into place to satisfy the terms of the individual exemption.

As a leading independent fiduciary, Evercore Trust has extensive experience designing and conducting independent audits ERISA Section 408(g), standard QPAM audits for in-house asset managers and QPAM Exemption compliance audits for financial institutions otherwise disqualified from relying on the QPAM Exemption.

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