The Department of Labor on Friday announced that it had granted Citigroup an exemption to continue providing asset management services to U.S. retirement plans.
The exemptions for qualified professional asset managers, known as QPAMs, are required whenever a money manager's affiliates or parent is convicted on criminal charges. Citicorp's guilty plea with the Department of Justice for currency price fixing was accepted by the U.S. District Court in New Haven, Conn., in 2017. Citicorp is the parent company of Citigroup.
The QPAM exemption was created in 1984 and allows institutions to engage in transactions involving U.S. retirement assets from 401(k) plans, individual retirement accounts and corporate pension plans that are otherwise prohibited under the Employee Retirement Income Security Act.
This is the third time the Labor Department has approved a QPAM exemption for Citigroup since 2017 and the latest exemption will be in effect until January 2027.
The exemption, which comes with specific conditions, was granted because it was considered administratively feasible, in the interests of plans served by Citigroup, and "protective of the rights of the participants and beneficiaries" of those plans, according to a Labor Department notice.
A Citigroup spokesman declined to comment.
The Labor Department in July unveiled a proposed amendment to modify its QPAM exemption by, among other items, expanding the types of misconduct that disqualify financial institutions from using the exemption.