ERISA Assets: QPAM and INHAM Audit Legal Requirements and Best Practices

I am happy to announce that I will be joined by esteemed colleagues Howard Pianko, Esquire (Seyfarth Shaw) and Virginia Bartlett (Bartlett O'Neill Consulting) on September 10, 2013 from 1:00 to 2:30 pm EST to talk about QPAM and INHAM compliance audits. See below for more information. Click to register for this forthcoming educational event about ERISA requirements. (Note: I am given a few complimentary guest passes. Contact me if you are interested and they are still available.)

This CLE webinar will prepare counsel to advise asset manager clients regarding Qualified Professional Asset Manager (QPAM) and in-house asset manager (INHAM) audits as required by the Department of Labor. The panel will review the new exemption rules, who can conduct an audit, what the process entails, and how to showcase good practices with existing and prospective plan sponsors.


An opportunity to manage part of the $17 trillion retirement industry assets is a key business strategy for many financial organizations. ERISA plans present a number of unique challenges due to the rules, regulations and increasing litigation brought against asset managers. Compliance is critically important.

The U.S. DOL has changed rules on activities asset managers can undertake if they manage ERISA assets. Entities like banks, insurance companies, hedge funds and SEC-registered investment advisors must have documented policies and procedures for types of trading, parties in interest and internal controls.

In addition, a regular audit of the activities of a QPAM and/or INHAM must be conducted by persons who are knowledgeable about ERISA and can render an objective assessment as to whether the exemption is justified.

Listen as our ERISA-experienced panel provides a guide for counsel on this recent mandate, why it is important, how to comply, and what an asset manager can learn from the audit process to mitigate litigation risk.

  1. QPAM and INHAM rules
    1. Definition
    2. Exemption allowances before 2010
    3. Exemption allowances after 2010
    4. Consequences of not getting a QPAM or INHAM audit or getting one and failing
  2. Nature of the QPAM and INHAM audit
    1. Qualifications for who can perform the audit
    2. Components of the audit
    3. Documents, timetable and process of the audit
    4. Involvement of outside and internal counsel
  3. How the audit is used
    1. What the U.S. Department of Labor looks for
    2. Correcting deficiencies
    3. Using the audit as a marketing tool
    4. Lessons learned from the audit as a way to mitigate litigation risk


The panel will review these and other key questions:

  • Who is a QPAM or INHAM?
  • What determines when a QPAM or INHAM audit is required?
  • What is the audit process like in terms of length of time it takes to complete, the documents needed, and the role of outside counsel and the QPAM or INHAM auditor?
  • How can the QPAM or INHAM audit be used to mitigate suits about procedural prudence and fiduciary breach?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.


Dr. Susan Mangiero, AIFA, CFA, FRM
Fiduciary Leadership, Trumbull, Conn.

She has provided testimony before the ERISA Advisory Council, the OECD and the International Organization of Pension Supervisors, as well as offered expert testimony and behind the scenes forensic analysis, calculation of damages and rebuttal report commentary for various investment governance, investment performance, fiduciary breach, prudence, risk and valuation matters.

Howard Pianko, Partner
Seyfarth Shaw, New York

He advises clients on matters relating to employee benefits, executive compensation, fiduciary responsibility and benefit related litigation.

Virginia Bartlett, Partner
Bartlett O'Neill Consulting, Atlanta

She has over 30 years of experience in working with all types of employee benefit programs. She has extensive experience in the design and implementation of employee benefit programs, consulting on mergers and acquisitions issues that relate to employee benefit plan issues, and conducting IRS and ERISA compliance reviews.

Qualified Professional Asset Manager (QPAM) Webinar Slides

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The U.S. Department of Labor estimates that there are roughly 4,400 financial organizations relying upon the DOL’s Qualified Professional Asset Manager (“QPAM”) class exemption when managing the assets of their own employee benefit plans. Maintaining QPAM status is important for these asset managers as this class exemption facilitates their ability to make investment decisions with respect to their plans without the need to monitor compliance with the prohibited transaction rules of Section 406(a) of ERISA.  Following an amendment to the QPAM class exemption by the DOL that went into effect in 2012, to secure their QPAM status when they manage the assets of plans they sponsor, financial firms must satisfy an additional hurdle to be able to meet the QPAM exemption requirements - an annual compliance audit conducted by an independent party.

With an impending June 30, 2013 deadline to complete their QPAM audits, financial firms managing assets of their sponsored ERISA plans are confronting the intricacies of this audit process. The goal of this informative and timely webinar is to help asset managers understand what is required to maintain QPAM status with respect to transactions they direct for their own plans.  Join an inter-disciplinary panel of legal, auditing and economic experts to learn about these QPAM audit requirements and how to conduct a QPAM audit.  Topics that will be covered include:

  • The QPAM exemption, why and when an audit is required;
  • QPAM audit requirements;
  • How trading activity is tested;
  • What policies and procedures must be reviewed;
  • Logistics of data gathering and examination of this data;
  • Type of report that an organization is likely to receive; and
  • Correcting any deficiencies uncovered by the audit team.

On May 1, 2013, Dr. Susan Mangiero co-presented as part of a webinar entitled "QPAM Compliance Audits: How Asset Managers Can Minimize Regulatory Risks and the Cost of Breach." Sponsored by Seyfarth Shaw, LLP, the program described the consequences of non-compliance as well as the governance and risk management benefits associated with a QPAM audit.

Click to download the QPAM webinar slides from May 1, 2013.