Qpam

[fidu]

do trust departments of state chartered banks have different oversight responsibilities as a fiduciary of ERISA governed accounts managed by QPAMS as compared to those managed by non qpams?

[fidu]

any guidance on this one would be greatly appreciated.

[jpod]

Don't have a clue, but I imagine that the relevant state laws and regulations are easily researchable.

By the way, are you using the term "QPAM" to mean one as defined in PTE 84-14, or something more generic?

[fidu]

YES - specifically the QPAM issue in 84-14.

and im not concerned w/ state law issues, only with fiduciary duties under ERISA that relate to the QPAM inv. mgr as opposed to a non QPAM type "bill and teds excellent investment managers". does the ficuciary obligation of the trustee to oversee the investments change if the mgr is a QPAM or NOT?

Thanks again.

[jpod]

The definition of QPAM is relevant solely for purposes of the exemption from 406(a) prohibited transactions available under 84-14. I can't imagine how the trustee would be relieved of any particular ERISA fiduciary responsibilities as a result of the investment manager having QPAM status. If you explain to the board why you think this is a possibility, maybe we can be of some help?

[fidu]

I agree with you, however colleagues believe differently. somehow, they interpret the QPAM status to somehow relieve fiduciary oversight responsibilities of the trustee to monitor the investment manager, and the investments that manager makes as far as whether they are permissible under the terms of the trust agreement.

It is my understanding that the investment manager must adhere to the terms of the trust agreement whether they have QPAM status or not.

Colleagues argue that we have no duty to make sure QPAMs only invest as permitted under the trust agreement.

[Guest halka]

My vague understanding is that QPAM status is simply necessary to qualify the Plan for certain prohibited transaction exemptions. The QPAM is still an ERISA fiduciary, the plan trustee (that appointed and oversees the QPAM) is an ERISA fiduciary -- without regard to whether the trustee is a state bank or other entity. The QPAM's investment activities are dictated by its contract w/ the Plan (trustee) and would have to comply w/ plan and ERISA provisions.