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DOL Finalizes Amendment to INHAM Prohibited Transaction Exemption

The Department of Labor (DOL) recently finalized an amendment to Prohibited Transaction Exemption 96-23. PTE 96-23 permits certain transactions by an employee benefit plan that would otherwise be prohibited by ERISA, where the plan?ÇÖs assets are managed by an in-house asset manager (INHAM) and other conditions are satisfied. The amendment makes several changes to the existing exemption, including: expanding the definition of INHAM to include a subsidiary that is 80 percent or more owned by the employer or a parent; permitting transactions with a ?Ç£co-joint venturer?Ç¥ under certain circumstances; and extending the exemption to cover certain existing commercial real estate leases. The amendment also increases the exemption?ÇÖs ?Ç£related person?Ç¥ test threshold from 5 percent ownership to 10 percent, and increases from $50 million to $85 million the amount of assets that must be managed to qualify as an INHAM. The amendment can be found here.

The lawyers of our Employee Benefits and Executive Compensation Practice Group are readily able to assist companies on a nationwide basis with implementing sophisticated benefit plans and providing answers to their most challenging compensation issues. Additionally, our lawyers are well aware of the daily employee benefits challenges facing companies of all sizes and are capable of helping in-house lawyers and human resources personnel with the day-to-day advice and guidance necessary to properly administer employee benefits plans.

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April 2011