DOL issues class exemption for plan asset transactions determined by in-house asset managers

Article Abstract:

The Department of Labor has approved a class exemption from prohibited transaction laws for certain transactions engaged in by an in-house asset manager. An in-house asset manager is defined as a registered investment adviser controlling more than $50 million in plan assets, the employer's plan must have aggregate assets in excess of $250 million, and the manager must be a wholly owned subsidiary of the employer. The exemptions are for specific transactions including commercial leases, services for public accommodations owned by the employer, and transactions meeting arm's length standards.

United States, Qualified benefit plans

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Employer's direct payment of investment management fees and compensation on qualified plan's behalf are deductible under section 162 and are not plan contributions

Article Abstract:

The IRS stated in Revenue Ruling 86-142 that investment management fees charged on a flat percentage and recurring basis were part of the administrative expenses of a pension plan and could be deducted under IRC 162 or 212. If the Service had ruled that these fees were a contribution to the plan, the employer offering this plan could not have taken a deduction. In this ruling, the IRS also listed certain other kinds of administrative expenses which would be deductible under IRC 162.

Tax deductions

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