The Labor Department is expected to release a long-awaited class exemption tomorrow that will allow large employers to make investments when certain technical legal violations arise.
The class exemption for in-house asset managers, expected to be in tomorrow's Federal Register, will have one general and three specific parts. The general exemption would allow plan sponsors that have at least $250 million in assets (with $50 million under direct management by an in-house manager) to make certain transactions with party-in-interest service providers by using the in-house manager. The in-house manager would need to be a registered investment adviser and would make all decisions concerning the technical transactions.
The class exemption also includes three specific exemptions: One would allow the plan to lease up to 15% of office or commercial space it owns to the employer; the second would allow the plan to rent residential space to employees; the third would allow a party-in-interest to stay at, or use the facilities of, a hotel or motel owned by the plan.
