Notice2026-06408
Proposed Exemption for The Goldman Sachs Group, Inc. (Goldman) Located in New York, New York
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 2, 2026
Effective
June 9, 2026
Issuing agencies
Labor DepartmentEmployee Benefits Security Administration
Abstract
If granted, this exemption would permit Goldman-related asset managers to rely on Prohibited Transaction Exemption 84-14 (PTE 84-14) notwithstanding the GS Malaysia FCPA Conviction (described below), if certain conditions are met.
Full Text
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<title>Federal Register, Volume 91 Issue 63 (Thursday, April 2, 2026)</title>
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[Federal Register Volume 91, Number 63 (Thursday, April 2, 2026)]
[Notices]
[Pages 16745-16755]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-06408]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
[Exemption Application No. D-12122]
Proposed Exemption for The Goldman Sachs Group, Inc. (Goldman)
Located in New York, New York
AGENCY: Employee Benefits Security Administration, Department of Labor.
ACTION: Notice of proposed exemption.
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SUMMARY: If granted, this exemption would permit Goldman-related asset
managers to rely on Prohibited Transaction Exemption 84-14 (PTE 84-14)
notwithstanding the GS Malaysia FCPA Conviction (described below), if
certain conditions are met.
DATES: If granted, this exemption will be in effect for the period
beginning on June 9, 2026, and ending on June 8, 2031.
Comments due: Written comments and requests for a public hearing on
the proposed exemption must be received by the Department of Labor (the
Department) by May 14, 2026.
ADDRESSES: All written comments and requests for a hearing should be
sent to the Employee Benefits Security Administration (EBSA), Office of
Exemption Determinations, Attention: Application No. D-12122:
<bullet> Via email to <a href="/cdn-cgi/l/email-protection#bfda92f0fafbffdbd0d391d8d0c9"><span class="__cf_email__" data-cfemail="c8ade5878d8c88aca7a4e6afa7be">[email protected]</span></a>; or
<bullet> Online through <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the
``Submit a comment'' instructions.
Any such comments or requests should be sent by the end of the
scheduled comment period. The application for exemption and the
comments received will be available for public inspection in the Public
Disclosure Room of the Employee Benefits Security Administration, U.S.
Department of Labor, Room N-1515, 200 Constitution Avenue NW,
Washington, DC 20210 ((202) 693-8673). See SUPPLEMENTARY INFORMATION
below for additional information regarding comments.
FOR FURTHER INFORMATION CONTACT: Blessed Chuksorji-Keefe of the
Department at (202) 693-8540. This is not a toll-free number.
SUPPLEMENTARY INFORMATION:
Comments: Persons are encouraged to submit all comments
electronically and to not follow with paper copies. Comments should
state the nature of the person's interest in the proposed exemption and
the manner in which the person would be materially affected by the
exemption, if granted. Any person who may be materially affected by an
exemption can request that the Department hold a hearing on the
exemption. A request for a hearing must state: (1) the name, address,
telephone number, and email address of the person making the request;
(2) the nature of the person's interest in the exemption and the manner
in which the person would be materially affected by the exemption; and
(3) a statement of the issues to be addressed and a general description
of the evidence to be presented at the hearing. The Department will
grant a request for a hearing made in accordance with the requirements
above where a hearing is necessary to fully explore material factual
issues identified by the person requesting the hearing. A notice of
such hearing shall be published by the Department in the Federal
Register. The Department may decline to hold a hearing if: (1) the
request for the hearing does not meet the requirements above; (2) the
only issues identified for exploration at the hearing are matters of
law; or (3) the factual issues identified can be fully explored through
the submission of evidence in written (including electronic) form.
Warning: The Department will include all comments received in the
public record without change and will make them available online at
<a href="https://www.regulations.gov">https://www.regulations.gov</a>. The Department notes that it will include
any personal information provided in the public record and online,
unless the commenter claims that any of the information included is
confidential, or the disclosure of such information is restricted by
statute. If you submit a comment, EBSA recommends that you include your
name and other contact information in the body of your comment, but DO
NOT submit information that you consider to be confidential, otherwise
protected (such as a Social Security number or an unlisted phone
number) or confidential business information that you do not want
publicly disclosed. If EBSA cannot read your comment due to technical
difficulties and cannot contact you for clarification, EBSA might not
be able to consider your comment.
[[Page 16746]]
Additionally, the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website is an
``anonymous access'' system, which means EBSA will not know your
identity or contact information unless you provide them in the body of
your comment. If you send an email directly to EBSA without going
through <a href="https://www.regulations.gov">https://www.regulations.gov</a>, your email address will be
automatically captured and included as part of the comment that is
placed in the public record and made available on the internet.
Background
1. The rules set forth in section 406 of the Employee Retirement
Income Security Act of 1974, as amended, (ERISA) and section 4975(c)(1)
of the Internal Revenue Code of 198, as amended, (the Code) proscribe
certain ``prohibited transactions'' between plans and parties related
to those plans. Under ERISA section 3(14), such parties are known as
``parties in interest,'' and include, among others, the plan fiduciary,
a sponsoring employer of the plan, service providers to the plan, and
certain of their affiliates.\1\
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\1\ Under the Code, such parties, or similar parties, are
referred to as ``disqualified persons.''
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2. The prohibited transaction provisions under ERISA section 406(a)
and Code section 4975(c)(1) prohibit, in part, sales, leases, loans or
the provision of services between a party in interest and a plan (or an
entity whose assets are deemed to constitute the assets of a plan), as
well as the use of plan assets by or for the benefit of a party in
interest or a transfer of plan assets to a party in interest.\2\ Under
ERISA section 408(a) and Code section 4975(c)(2), the Department has
the authority to grant relief from the prohibited transaction
provisions of ERISA and the Code in accordance with its exemption
procedures if the Department finds that an exemption is: (a)
administratively feasible for the Department; (b) in the interests of
the plan and of its participants and beneficiaries; and (c) protective
of the rights of participants and beneficiaries.\3\
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\2\ The prohibited transaction provisions also include certain
fiduciary prohibited transactions under ERISA section 406(b) and
Code section 4975(c)(1)(E) and (F). These include transactions
involving fiduciary self-dealing, fiduciary conflicts of interest,
and kickbacks to fiduciaries. PTE 84-14 provides only very narrow
conditional relief for transactions described in ERISA section
406(b).
\3\ 29 CFR part 2570, subpart B at 89 FR 4662, January 24, 2024.
Effective December 31, 1978, section 102 of Reorganization Plan No.
4 of 1978, 5 U.S.C. App. 1 (1996), transferred the authority of the
Secretary of the Treasury to issue exemptions of the type requested
by Goldman to the Secretary of Labor. Therefore, this notice of
proposed exemption is issued solely by the Department.
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3. PTE 84-14 is a class exemption that reflects the Department's
conclusion that it can provide broad relief from the prohibited
transaction provisions of ERISA section 406(a) and Code section
4975(c)(1) only if the commitments and the investments of plan assets
and the negotiations leading thereto are the sole responsibility of an
independent discretionary manager that meets the exemption's
conditions. This manager is referred to as a ``qualified professional
asset manager'' (a QPAM).
4. PTE 84-14 Section I(g) precludes relief under the exemption if
the QPAM, an ``affiliate'' thereof,\4\ or any direct or indirect five
percent or more owner of the QPAM, within 10 years immediately
preceding the transaction: (a) has been convicted or released from
imprisonment, whichever is later, as a result of criminal activity
described in Section I(g); or (b) has engaged in prohibited misconduct
as described in that section (in both cases subject to the
Ineligibility Date described in PTE 84-14 Section I(h)).\5\
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\4\ Section VI(d) of PTE 84-14 defines the term ``affiliate''
for purposes of Section I(g) as ``(1) Any person directly or
indirectly through one or more intermediaries, Controlling,
Controlled by, or under Common Control with the person; (2) Any
director of, Relative of, or partner in, any such person, (3) Any
corporation, partnership, trust or unincorporated enterprise of
which such person is an officer, director, or a five percent or more
partner or owner; and (4) Any employee or officer of the person
who--(A) Is a highly compensated employee (as defined in Code
section 4975(e)(2)(H) or officer (earning ten (10) percent or more
of the yearly wages of such person); or (B) Has direct or indirect
authority, responsibility, or control regarding the custody,
management or disposition of Plan assets.''
\5\ The prohibited misconduct provision became effective on June
17, 2024.
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5. The Department's inclusion of Section I(g) in PTE 84-14 is
based, in part, on an expectation that QPAMs will maintain a high
standard of integrity. This expectation extends not only to the QPAM
itself but also to those who may be in a position to influence the
policies of the QPAM.
Summary of Facts and Representations \6\
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\6\ The Summary of Facts and Representations is based on
Goldman's representations, unless indicated otherwise.
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6. Goldman is a global investment banking, securities and
investment management firm. Goldman has a number of affiliated asset
managers, including: The Goldman Sachs Trust Company, N.A.; Goldman
Sachs Bank USA; Goldman Sachs & Co. LLC; Goldman Sachs Asset
Management, L.P.; Goldman Sachs Asset Management International; Goldman
Sachs Hedge Fund Strategies LLC; GS Investment Strategies, LLC; GSAM
Stable Value, LLC; The Ayco Company, L.P.; Aptitude Investment
Management LP; Rocaton Investment Advisors, LLC; United Capital
Financial Advisers, LLC; and PFE Advisors, Inc. (together, the Goldman
Affiliated QPAMs). Goldman may be related to, but does not own a
controlling interest in, a number of other asset managers (the Goldman
Related QPAMs). The Goldman Affiliated QPAMs and Goldman Related QPAMs
(together, the Goldman QPAMs) manage the assets of ``Covered Plans.''
\7\
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\7\ A ``Covered Plan'' is a plan subject to Part 4 of Title 1 of
ERISA (``ERISA-covered plan'') or a plan subject to section 4975 of
the Code (``IRA'') with respect to which a Goldman Affiliated QPAM
or a Goldman Related QPAM relies on PTE 84-14, or with respect to
which a Goldman QPAM (or any Goldman Sachs affiliate) has expressly
represented that the manager qualifies as a QPAM or relies on PTE
84-14. A Covered Plan does not include an ERISA-covered plan or IRA
to the extent the Goldman Affiliated QPAM or Goldman Related QPAM
has expressly disclaimed reliance on QPAM status or PTE 84-14 in
entering into its contract, arrangement, or agreement with the
ERISA-covered plan or IRA.
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7. On October 21, 2020, Goldman Sachs Malaysia (GS Malaysia), a
wholly owned subsidiary of Goldman, entered a guilty plea in the
District Court for the Eastern District of New York for conspiracy to
commit offenses against the United States in violation of the anti-
bribery provisions of the Foreign Corrupt Practices Act of 1977 (FCPA)
(the Plea Agreement).\8\ The Plea Agreement provides that, between 2009
and 2014, Goldman, together with several of its wholly-owned
subsidiaries and affiliated entities,\9\ through certain of its agents
and employees including Tim Leissner and Roger Ng, knowingly and
willfully conspired and agreed with others to corruptly provide
payments and things of value to, or for the benefit of, certain foreign
officials and their relatives.
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\8\ The Plea Agreement was entered into between the United
States of America, by and through the United States Department of
Justice, Criminal Division, Fraud Section and Money Laundering and
Asset Recovery Section, and the United States Attorney's Office for
the Eastern District of New York and Goldman Sachs (Malaysia) Sdn.
Bhd., Cr. No. 20-438 (MKB), filed Oct. 21, 2020. See 86 FR 131,
January 4, 2021, for a complete summary of the Statement of Facts
that served as the basis for the Plea Agreement.
\9\ Goldman Sachs (Malaysia) Sdn. Bhd, Goldman Sachs (Singapore)
Pte., Goldman Sachs International, Goldman Sachs Bank USA, Goldman
Sachs & Co. L.L.C. and Goldman Sachs (Asia) L.L.C.
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8. On May 28, 2021, the Department granted PTE 2021-02 to protect
Covered Plans from the harms that Goldman represented would arise if
Goldman QPAMs were no longer able to rely on PTE 84-14 following the
impending conviction of GS Malaysia (the GS Malaysia FCPA Conviction).
PTE 2021-02 is a five-year exemption that permits Goldman QPAMs to
engage in the
[[Page 16747]]
transactions covered by PTE 84-14, notwithstanding the GS Malaysia FPCA
Conviction, if a number of conditions are met. The GS Malaysia FCPA
Conviction was entered on June 9, 2021, so the relief in PTE 2021-02
expires on June 8, 2026.
New Application for Relief
9. On August 18, 2025, Goldman applied for an exemption that would
continue the temporary relief afforded by PTE 2021-02 for an additional
five years. In its application, Goldman requested fewer conditions than
the Department's recent PTE 84-14 Section I(g) individual
exemptions.\10\ In support of its request for less demanding
conditions, Goldman represented that the Goldman Affiliated QPAMs'
continual demonstration of a vigorous culture of compliance makes many
of PTE 2021-02's conditions unnecessary. Specifically, Goldman states
that the following conditions are unnecessary and do not further the
statutory aim of protecting plans and their participants:
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\10\ See PTE 2017-03, 82 FR 61816 (December 29, 2017); PTE 2017-
04, 82 FR 61840 (December 29, 2017); PTE 2017-05, 82 FR 61864
(December 29, 2017); PTE 2017-06, 82 FR 61881 (December 29, 2017);
PTE 2017.
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(a) Independent Audit: Goldman states that an independent audit of
an asset management unit that was accused of no wrongdoing is
superfluous, expensive, time-consuming, and burdensome;
(b) Compliance Review: Goldman states that the Compliance Officer
and Exemption Review provisions should be withheld from a new five year
exemption because it was a non-fiduciary line of business within an
asset management affiliate that was convicted of a crime;
(c) Contractual Obligations: Goldman states that the Department's
recent re-configuration of the contractual obligations conditions in
QPAM section I(g) exemptions goes beyond what is contemplated by ERISA
and the Code, and opens the door to frivolous litigation and liability
traps; and
(d) Policies and Procedures and Training: Goldman represents that
PTE 2021-02 requires the Goldman Affiliated QPAMs to develop and
implement duplicative and overlapping policies, procedures, and
training, without regard to the already developed and implemented
policies, procedures, and training that ensured, and continue to
ensure, compliance with ERISA and the Code.
The Applicant requests that, if the Department finds it necessary
to impose conditions on the Goldman Affiliated QPAMs in connection with
the remaining period of disqualification, the Department should grant a
simplified exemption, modeled after the exemption granted to Citigroup
in 2012 (PTE 2012-08).
Department's Response: Based on significant analysis and review of
Goldman's compliance with the original exemption and the Goldman QPAMs'
compliance with ERISA, demonstrated through the prior independent
audits and compliance reviews required by the Department, and the fact
that the conduct underlying the disqualifying conviction took place
over twelve years ago, the Department is persuaded that certain
elements of the simplified exemption requested by Goldman would be in
the interest of, and sufficiently protective of, Covered Plans.
Harm to Covered Plans in the Absence of QPAM Relief
10. In support of its exemption request, Goldman provided estimates
of the liquidation costs that each type of portfolio managed by the
Goldman Affiliated QPAMs would incur if the Goldman Affiliated QPAMs
are denied relief.
11. Goldman represents that the entirety of Covered Plan assets
could be subject to liquidation and reinvestment costs, as well as the
costs associated with identifying and retaining a transition consultant
and a new investment manager, should these clients choose to terminate
a Goldman Affiliated QPAM as their manager and appoint a new manager.
Goldman notes that whether a plan elects to terminate its Goldman
Affiliated QPAM is within the fiduciary decision-making process and in
the plan fiduciary's control. As such, Goldman states that it is unable
to estimate with any accuracy the number of Covered Plan clients that
would terminate their relationships with a Goldman Affiliated QPAM as a
result of the QPAMs' loss of PTE 84-14 relief. Covered Plans that do
elect to terminate and find a new manager would likely undertake to
transfer all of their assets from the Goldman Affiliated QPAMs, rather
than partially transferring only those assets whose strategies rely on
PTE 84-14, meaning the Covered Plan's entire portfolio would be subject
to transaction and ancillary costs.
Fixed Income Products
12. The Goldman Affiliated QPAMs rely on PTE 84-14 when buying and
selling fixed income products. Over 11,400 accounts managed by the
Goldman Affiliated QPAMs invest in fixed income products, with a total
portfolio of over $79 billion in market value of ERISA and public plan
assets, including $66 billion in ERISA assets. If PTE 84-14 were lost,
plan clients of the Goldman Affiliated QPAMs who choose to leave
Goldman could suffer different liquidation costs depending on the
strategy within fixed income, such as short duration and government
bonds and stable value strategies, long duration bonds, mortgage-backed
and asset-backed securities, and pooled funds and separate accounts in
a stable value strategy. The aggregate cost to liquidate and reinvest
these combined categories would range from $606,026,000 to
$801,558,000.
Equity Strategies
13. The Goldman Affiliated QPAMs also rely on PTE 84-14 when
implementing equity strategies. Clients of the Goldman Affiliated QPAMs
have over $21 billion invested in equity strategies. On average, the
liquidation costs to these clients might range from 58-82 basis points,
which equates to between $126.7-$177.2 million. On average, costs to
reinvest assets with another manager could be between 58-82 basis
points, equating to an additional $126.7-$177.2 million, depending on
the strategy.
Alternative Strategies
14. The Goldman Affiliated QPAMs also rely on PTE 84-14 for
alternative investments, including private equity, real estate,
commodities, and hedge funds. Approximately $3.2 billion in ERISA and
public plan client assets are invested by the Goldman Affiliated QPAMs
in alternative strategies. If such investments needed to be liquidated,
transaction costs could range from 25-100 basis points, which equates
to between $7.9-$31.6 million, in addition to reinvestment costs of
between 25-120 basis points, depending on the strategy, equating to an
additional $7.9-$38 million.
Ancillary Costs
15. Goldman represents that the ancillary administrative and
similar costs to plans of changing managers could be significant. In
addition to the cost of liquidating assets, there are costs associated
with identifying and selecting new managers and then reinvesting
assets. Associated costs could include consulting fees for finding new
managers, legal fees for the negotiation of a new investment management
agreement as well as assignment of other related contracts, and
appraisal fees for underlying assets. Goldman notes that plans can, and
often do, elect to hire transition managers, rather than have Goldman
liquidate the plan's holdings. In that event, Goldman
[[Page 16748]]
has no transparency into the contractual arrangement between plans and
their transition managers and is not privy to the fees that such
transition managers may charge. According to Goldman, ``these
consulting and legal costs can reach into the hundreds of thousands of
dollars.'' \11\
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\11\ Minahan Report, ] 19.
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16. Based on data available in the market and from submissions by
other applicants, Goldman estimates that plans would incur consulting
fees of $30,000 to $50,000 for a new manager search and incur 25-50
hours of client time to evaluate alternative managers.
This Proposed Exemption and Summary of Protective Conditions
17. In developing administrative exemptions under ERISA section
408(a), the Department implements its statutory directive to propose
only exemptions that are appropriately protective, and in the interest
of, affected plans and IRAs. Therefore, the Department is conditioning
exemptive relief upon the adherence of the Goldman QPAMs to conditions
that would protect the rights of Covered Plans (and their participants
and beneficiaries) and allow them to continue to benefit from the
transactions described in PTE 84-14.\12\ The terms of this proposed
exemption are intended to promote Goldman QPAMs' adherence to basic
fiduciary standards under Title I of ERISA and the Code and reinforce
their obligation to act with a high degree of integrity on behalf of
their Covered Plan clients, and to ensure that the fiduciary and asset
management functions of the QPAMs were not involved in or impacted by
the conduct underlying the GS Malaysia FCPA Conviction.
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\12\ The Department notes that this is a summary of the
conditions set forth in the proposal; however, the governing
conditions for the exemptive relief are those reflected in the
operative text in Section III below.
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18. This proposed exemption requires that, with the exception of
one individual who worked in a non-fiduciary business within a Goldman
Affiliated QPAM, and who had no responsibility for, and exercised no
authority in connection with, the management of plan assets, neither
the Goldman Affiliated QPAMs and Goldman Related QPAMs (including their
officers, directors, employees, and agents (other than Goldman Sachs
Malaysia) nor any other party engaged on behalf of the Goldman
Affiliated QPAMs and Goldman Related QPAMs who had responsibility for,
or exercised authority in connection with the management of plan
assets: (a) knew of, and or had reason to know of the criminal conduct
of Goldman Sachs Malaysia that is the subject of the Goldman Sachs
Malaysia FCPA Conviction; (b) participated in the criminal conduct of
Goldman Sachs Malaysia that is the subject of the Goldman Sachs
Malaysia FCPA Conviction; and/or (c) received direct compensation, or
knowingly received indirect compensation, in connection with the
criminal conduct of Goldman Sachs Malaysia that is the subject of the
Goldman Sachs Malaysia FCPA Conviction.
19. Further, Goldman Affiliated QPAMs may not employ or knowingly
engage any of the individuals who participated in the criminal conduct
underlying the GS Malaysia FCPA Conviction. This means that no
individual who participated in criminal misconduct at GS Malaysia may
be employed by any Goldman Affiliated QPAM. A Goldman Affiliated QPAM
also must not have exercised authority over the assets of any Covered
Plan client in a manner that it knew or should have known would:
further the criminal conduct underlying the GS Malaysia FCPA
Conviction; or cause the Goldman Affiliated QPAM to directly or
indirectly profit from the criminal conduct underlying the GS Malaysia
FCPA Conviction. Further, the proposed exemption requires that any
failure of a Goldman Affiliated QPAM or a Goldman Related QPAM to
satisfy Section I(g) of PTE 84-14 arose solely from the Goldman Sachs
Malaysia FCPA Conviction.
20. The proposed exemption requires that no Goldman Affiliated QPAM
may use its authority or influence to direct an ``investment fund'' (as
defined in PTE 84-14 Section VI(b)) that is subject to ERISA or the
Code to enter into any transaction with GS Malaysia, or to engage GS
Malaysia to provide any service to such investment fund, regardless of
whether such transaction or service may otherwise be within the scope
of relief provided by an administrative or statutory exemption. Other
than with respect to employee benefit plans maintained or sponsored for
its own employees or the employees of an affiliate, GS Malaysia will
not act as a fiduciary within the meaning of ERISA section 3(21)(A)(i)
or (iii), or Code section 4975(e)(3)(A) and (C), with respect to ERISA-
covered plan and IRA assets.
21. Each Goldman Affiliated QPAM must continue to implement and
maintain the written policies and procedures that were implemented
previously in accordance with PTE 2021-02 (the Policies) that are
reasonably designed to ensure that: (a) the asset management decisions
of the Goldman Affiliated QPAMs are conducted independently of Goldman
and GS Malaysia's corporate management and business activities; (b) the
Goldman Affiliated QPAMs fully comply with ERISA's fiduciary duties,
and with ERISA's and the Code's prohibited transaction provisions; (c)
the Goldman Affiliated QPAMs do not knowingly participate in any other
person's violation of ERISA or the Code with respect to Covered Plans;
(d) any filings or statements made by the Goldman Affiliated QPAMs to
regulators on behalf of, or in relation to, Covered Plans are
materially accurate and complete; (e) the Goldman Affiliated QPAMs do
not make material misrepresentations or omit material information in
their communications with such regulators, or in their communications
with Covered Plans; and (f) the Goldman Affiliated QPAMs comply with
the terms of the exemption.
22. The proposed exemption requires each Goldman Affiliated QPAM to
continue to implement and maintain a program of training (the Training)
to be conducted at least annually by a prudently selected professional
with appropriate training and proficiency with ERISA and the Code, for
all relevant asset/portfolio management, trading, legal, compliance,
and internal audit personnel. This required Training may be conducted
electronically and must be set forth in the Policies and cover the
policies, ERISA and Code compliance, ethical conduct, the consequences
for not complying with the conditions of this exemption, and prompt
reporting of wrongdoing.
23. The proposed exemption requires that each Goldman Affiliated
QPAM submit to one audit, to be conducted in the final year of
exemptive relief by a prudently selected independent auditor with
appropriate technical training and proficiency with ERISA and the Code,
to evaluate the Goldman Affiliated QPAM's compliance with the Policies
and Training required by the exemption. As noted above, the Department
is persuaded by the Goldman QPAMs' prior ``clean'' audits that one,
final closing audit is appropriate to ensure the accountability of the
Goldman QPAMs with respect to their compliance with applicable sections
of ERISA, the Code, the Policies and Training, and this exemption. In
the event the closing audit reveals noncompliance with any applicable
requirement, the Department retains the ability take appropriate action
to exercise its investigatory powers under ERISA.
[[Page 16749]]
24. With respect to any arrangement, agreement, or contract between
a Goldman Affiliated QPAM and a Covered Plan, this proposal requires
the Goldman Affiliated QPAMs to agree and warrant: (a) to comply with
ERISA and the Code, including the standards of prudence and loyalty set
forth in ERISA section 404; (b) to refrain from engaging in prohibited
transactions that are not otherwise exempt; (c) to indemnify and hold
harmless the Covered Plan for any actual losses resulting directly from
a violation by the Goldman Affiliated QPAM of this exemption that
results in the termination of the exemption, a violation of ERISA's
fiduciary duties and of the prohibited transaction provisions of ERISA
and the Code, a breach of contract by the QPAM, or any claim arising
out of the failure of the Goldman Affiliated QPAM to qualify for the
exemptive relief provided by PTE 84-14 as a result of a violation of
Section I(g) of PTE 84-14, other than the Goldman Sachs Malaysia FCPA
Conviction; (d) not to require (or otherwise cause) the Covered Plan to
waive, limit, or qualify the liability of the Goldman Affiliated QPAM
for violating ERISA or the Code or engaging in prohibited transactions;
(e) with narrow exceptions, not to restrict the ability of such Covered
Plan to terminate or withdraw from its arrangement with the Goldman
Affiliated QPAM with respect to any investment in a separately managed
account or pooled fund subject to ERISA and managed by such QPAM; (f)
with narrow exceptions, not to impose any fees, penalties, or charges
for such termination or withdrawal; and (g) not to include exculpatory
provisions disclaiming or otherwise limiting the liability of the
Goldman Affiliated QPAM for a violation of such agreement's terms.
25. Unless already so provided, each Goldman Affiliated QPAM must
provide a notice of its obligations under the exemption to each Covered
Plan, a Federal Register copy of the notice of the exemption, a
separate summary describing the facts that led to the GS Malaysia FCPA
Conviction (the Summary), and a prominently displayed statement (the
Statement) that the GS Malaysia FCPA Conviction results in a failure to
meet a condition in PTE 84-14.
26. This proposed exemption requires each Goldman Affiliated QPAM
to designate a senior compliance officer (the Compliance Officer) to be
responsible for compliance with the Policies and Training requirements
described in this exemption. The Compliance Officer must conduct five
reviews, one for each of the five consecutive twelve-month periods that
comprise the Exemption Period, as defined in the Definitions of the
proposed exemption (each one-year period is referred to as the
Exemption Review), to determine the adequacy and effectiveness of the
implementation of the Policies and Training, and issue a written report
(the Exemption Report) on the findings.
27. This proposal requires Goldman to impose internal procedures,
controls, and protocols on GS Malaysia to reduce the likelihood of any
recurrence of conduct that is the subject of the GS Malaysia FCPA
Conviction. This exemption also requires Goldman to comply with
requirements imposed by U.S regulators in connection with the Goldman
Sachs Malaysia FCPA Conviction and provides a one-year termination
period in the event Goldman is found to have not materially complied
with such requirements.
28. The proposed exemption requires each Goldman Affiliated QPAM to
maintain written processes that clearly describe how the QPAM
identifies and quantifies ``actual losses'' and how Covered Plans may
recover or avoid incurring the losses for purposes of Section
III(j)(2).
29. The proposed exemption's conditions also include recordkeeping
requirements applicable to the Goldman Affiliated QPAMs; and require
disclosure of any Deferred Prosecution Agreement or Non-Prosecution
Agreement entered into by Goldman and U.S. regulators for certain
criminal activity.
30. Finally, the conditions of the proposed exemption require that
all the material facts and representations set forth in the Summary of
Facts and Representations are true and accurate at all times.
Statutory Findings
31. ``Administratively Feasible.'' The Department has tentatively
determined that the proposed exemption is administratively feasible for
the Department, because among other things, a qualified independent
auditor will perform three audits to determine whether the Goldman
Affiliated QPAM's comply with the terms of the exemption and adhere to
fundamental fiduciary concepts under ERISA, and complete a
corresponding written audit report which will be provided to the
Department and be made available to the public.
32. ``In the interest of.'' The Department has tentatively
determined that the proposed exemption is in the interests of the
participants and beneficiaries of affected Covered Plans. The
Department understands, based on representations from Goldman, that if
the requested exemption is denied, Covered Plans may be forced to find
other investment managers and may be deprived of the investment
management services that they expected to receive when they appointed
the Goldman Affiliated QPAMs. Loss of PTE 84-14 relief could force
Covered Plans fiduciaries to terminate the Goldman Affiliated QPAM
relationship that the Covered Plans' fiduciaries previously determined
to be in the best interests of the Covered Plans. Further, loss of PTE
84-14 relief and the termination of Goldman Affiliated QPAM
relationships would result in substantial liquidation and reinvestment
costs, as well as the costs associated with identifying and retaining a
transition consultant and a new investment manager.
33. ``Protective of.'' The Department has tentatively determined
that the proposed exemption is protective of the interests of the
participants and beneficiaries of affected Covered Plans. As described
above, the proposed exemption imposes a suite of affirmative
requirements and obligations upon the Goldman Affiliated QPAMs that
include but are not limited to: (a) the maintenance of the Policies and
Training; (b) a closing audit to ensure Goldman Affiliated QPAMs'
accountability with ERISA and the Code, the Policies and the Training,
and the conditions for the exemption; (c) the provision of certain
agreements and warranties on the part of the Goldman Affiliated QPAMs;
and (d) the designation of a Compliance Officer to ensure compliance
with the Policies and Training requirements under this proposed
exemption, and the Compliance Officer's completion of annual Exemption
Reviews and corresponding Exemption Reports. Finally, the Department
notes that the most recently completed independent audit under PTE
2021-02 did not identify any violation of the terms of PTE 2021-02.
Department's Note
34. The relief in this proposed exemption would terminate in the
event that an entity within the Goldman corporate structure is
convicted of any additional crime covered by PTE 84-14 Section I(g) or
participates in Prohibited Misconduct as defined in Section VI(s) and
VI(t) of PTE 84-14, or if any term of this exemption, if granted, is
violated. When interpreting and implementing this exemption, Goldman
and the relevant QPAM should resolve any ambiguities considering the
exemption's
[[Page 16750]]
protective purposes for Covered Plans. To the extent additional
clarification is necessary, these persons or entities should contact
EBSA's Office of Exemption Determinations by email (<a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="197c34767c7d597d7675377e766f">[email protected]</a>) or
phone (202-693-8540).
Notice to Interested Persons
Goldman will provide notice of this proposed exemption to its
Covered Plan clients by first class mail or email within twelve (12)
days after the publication of the notice of proposed exemption in the
Federal Register. The notice of this proposed exemption will contain a
supplemental statement, as required pursuant to 29 CFR 2570.43(a)(2)
and a Summary the Proposed Exemption. The supplemental statement will
inform interested persons of their right to comment on and to request a
hearing with respect to the pending exemption. Written comments and
hearing requests are due within 42 days after publication of this
notice of proposed exemption in the Federal Register. The Department
will make all comments available to the public.
Warning: If you submit a comment, EBSA recommends that you include
your name and other contact information in the body of your comment,
but DO NOT submit information that you consider to be confidential, or
otherwise protected (such as a Social Security number or an unlisted
phone number) or confidential business information that you do not want
publicly disclosed. All comments may be posted on the internet and can
be retrieved by most internet search engines.
General Information
The attention of interested persons is directed to the following:
(1) The fact that a transaction is the subject of an exemption
under ERISA section 408(a) and/or Code section 4975(c)(2) does not
relieve a fiduciary or other party in interest or disqualified person
from certain other provisions of ERISA and/or the Code, including any
prohibited transaction provisions to which the exemption does not apply
and the general fiduciary responsibility provisions of ERISA section
404, which, among other things, require a fiduciary to discharge his
duties respecting the plan solely in the interest of the participants
and beneficiaries of the plan and in a prudent fashion in accordance
with ERISA section 404(a)(1)(B); nor does it affect the requirement of
Code section 401(a) that the plan must operate for the exclusive
benefit of the employees of the employer maintaining the plan and their
beneficiaries;
(2) Before an exemption may be granted under ERISA section 408(a)
and/or Code section 4975(c)(2), the Department must find that the
exemption is administratively feasible, in the interests of the plan
and of its participants and beneficiaries, and protective of the rights
of participants and beneficiaries of the plan;
(3) The proposed exemption, if granted, will be supplemental to,
and not in derogation of, any other provisions of ERISA and/or the
Code, including statutory or administrative exemptions and transitional
rules. Furthermore, the fact that a transaction is subject to an
administrative or statutory exemption is not dispositive of whether the
transaction is in fact a prohibited transaction; and
(4) The proposed exemption, if granted, will be subject to the
express condition that the material facts and representations contained
in each application are true and complete, and that each application
accurately describes all material terms of the transaction which is the
subject of the exemption.
Proposed Exemption
The Department is considering granting the proposed exemption under
the authority of ERISA section 408(a) and Code Section 4975(c)(2), and
in accordance with the Department's exemption procedures.\13\ Effective
December 31, 1978, section 102 of Reorganization Plan No. 4 of 1978, 5
U.S.C. App. 1 (1996), transferred the authority of the Secretary of the
Treasury to issue exemptions of the type requested to the Secretary of
Labor. Therefore, this notice of proposed exemption is issued solely by
the Department.
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\13\ 29 CFR part 2570, subpart B (89 FR 4662, 4691, January 24,
2024).
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Section I. Definitions
(a) The term ``Goldman Sachs Malaysia FCPA Conviction'' means the
judgment of conviction against Goldman Sachs Malaysia in connection
with a U.S. plea by Goldman Sachs Malaysia to one count of conspiracy
to commit offenses against the United States, in violation of Title 18,
United States Code, Section 371, that is, to violate the anti-bribery
provisions of the Foreign Corrupt Practices Act of 1977, as amended,
see Title 15, United States Code, Sections 78dd-1 and 78dd-3.
(b) The term ``Covered Plan'' means a plan subject to Part IV of
Title I of ERISA (an ERISA-covered plan) or a plan subject to section
4975 of the Code (an IRA), in each case, with respect to which a
Goldman Affiliated QPAM relies on PTE 84-14, or with respect to which a
Goldman Affiliated QPAM (or any Goldman affiliate) has expressly
represented that the manager qualifies as a QPAM or relies on the QPAM
class exemption (PTE 84-14). A Covered Plan does not include an ERISA-
covered plan or IRA to the extent the Goldman Affiliated QPAM has
expressly disclaimed reliance on QPAM status or PTE 84-14 in entering
into a contract, arrangement, or agreement with the ERISA-covered plan
or IRA.
(c) The term ``Goldman'' means The Goldman Sachs Group, Inc.
(d) The term ``Goldman Affiliated QPAMs'' means The Goldman Sachs
Trust Company, N.A.; Goldman Sachs Bank USA; Goldman Sachs & Co. LLC;
Goldman Sachs Asset Management, L.P.; Goldman Sachs Asset Management
International; Goldman Sachs Hedge Fund Strategies LLC; GS Investment
Strategies, LLC; GSAM Stable Value, LLC; The Ayco Company, L.P.;
Aptitude Investment Management LP; Rocaton Investment Advisors, LLC;
United Capital Financial Advisers, LLC; and PFE Advisors, Inc., and any
future ``affiliate'' of Goldman (as defined in Part VI(d) of PTE 84-14)
that qualifies as a ``qualified professional asset manager'' (as
defined in PTE 84-14 Section VI(a)) \14\ and that relies on the relief
provided by PTE 84-14. The term ``Goldman Affiliated QPAMs'' excludes
Goldman Sachs Malaysia.
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\14\ In general terms, a QPAM is an independent fiduciary that
is a bank, savings and loan association, insurance company, or
investment adviser that meets certain equity or net worth
requirements and other licensure requirements and that has
acknowledged in a written management agreement that it is a
fiduciary with respect to each plan that has retained the QPAM.
---------------------------------------------------------------------------
(e) The term ``Goldman Related QPAMs'' means any current or future
``qualified professional asset manager'' (as defined in Section VI(a)
of PTE 84- 14) that relies on the relief provided by PTE 84-14, and
with respect to which Goldman Sachs Malaysia owns a direct or indirect
five (5) percent or more interest, but with respect to which Goldman
Sachs Malaysia is not an ``affiliate'' (as defined in section VI(d)(1)
of PTE 84-14). The term ``Goldman Related QPAMs'' excludes Goldman
Sachs Malaysia.
(f) The term ``Goldman Sachs Malaysia'' means Goldman Sachs
(Malaysia) Sdn. Bhd.
(g) The term ``Exemption Period'' means the five-year period
beginning on June 9, 2026, immediately following the expiration of the
exemptive relief in PTE 2021-02.
[[Page 16751]]
(h) The term ``Plea Agreement'' means the Plea Agreement entered
into between the United States of America, by and through the United
States Department of Justice, Criminal Division, Fraud Section and
Money Laundering and Asset Recovery Section, and the United States
Attorney's Office for the Eastern District of New York and Goldman
Sachs (Malaysia) Sdn. Bhd. Cr. No. 20-438 (MKB), filed October 21,
2020.
(i) The term ``Conviction Date'' means the date that a judgment of
conviction against Goldman Sachs (Malaysia) Sdn. Bhd., in Cr. No. 20-
438 (MKB), was entered in the United States District Court for the
Eastern District of New York.
(j) The term ``best knowledge,'' ``to the best of one's
knowledge,'' ``best knowledge at that time,'' and other similar ``best
knowledge'' terms include matters that are known to the applicable
individual or should be known to such individual upon the exercise of
such individual's due diligence required under the circumstances, and,
with respect to an entity other than a natural person, such term
includes matters that are known to the directors and officers of the
entity or should be known to such individuals upon the exercise of such
individuals' due diligence required under the circumstances.
(k) The ``conduct'' of any person or entity that is the ``subject
of'' any misconduct refers to the misconduct by any Goldman personnel
that is the basis of (or the subject of) the Goldman Sachs Malaysia
FCPA Conviction.
(l) The term ``participate in'' when used to describe an individual
or entity's participation in the Goldman Sachs Malaysia FCPA Conviction
refers not only to active participation in the conduct that is the
subject of the Goldman Sachs Malaysia FCPA Conviction but also includes
an individual or entity's knowledge or approval of the conduct that is
the subject of the Goldman Sachs Malaysia FCPA Conviction, without
taking active steps to prohibit such conduct, such as reporting the
conduct to the individual's supervisors, and to the Board of Directors.
Section II. Covered Transactions
If this proposed exemption is granted, the Goldman Affiliated QPAMs
and the Goldman Related QPAMs may rely on the exemptive relief provided
by Prohibited Transaction Class Exemption 84-14 (PTE 84-14) \15\ during
the Exemption Period, notwithstanding the Goldman Sachs Malaysia FCPA
Conviction, provided that the following conditions are satisfied:
---------------------------------------------------------------------------
\15\ 49 FR 9494 (March 13, 1984), as corrected at 50 FR 41430,
(Oct. 10, 1985), as amended at 70 FR 49305 (Aug. 23, 2005), as
amended at 75 FR 38837 (July 6, 2010), and as amended at 89 FR 23090
(April 3, 2024).
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Section III. Conditions
(a) Other than a single individual, who worked for a non-fiduciary
business within a Goldman Affiliated QPAM, and who had no
responsibility for, and exercised no authority in connection with, the
management of plan assets, the Goldman Affiliated QPAMs and Goldman
Related QPAMs (including their officers, directors, agents (other than
Goldman Sachs Malaysia), and the employees of the Goldman Affiliated
QPAMs and Goldman Related QPAMs (collectively, the Goldman QPAMs) did
not know of, did not have reason to know of, or did not participate in
the criminal conduct of Goldman Sachs Malaysia that is the subject of
the Goldman Sachs Malaysia FCPA Conviction. Further, any other party
engaged on behalf of the Goldman QPAMs who had responsibility for, or
exercised authority in connection with the management of plan assets
did not know of, did not have reason to know of, or participate in the
criminal conduct of Goldman Sachs Malaysia that is the subject of the
Goldman Sachs Malaysia FCPA Conviction;
(b) Other than a single individual, who worked for a non-fiduciary
business within a Goldman Affiliated QPAM, and who had no
responsibility for, and exercised no authority in connection with, the
management of plan assets, the Goldman Affiliated QPAMs and the Goldman
Related QPAMs (including their officers, directors, agents (other than
Goldman Sachs Malaysia), and employees of such Goldman Affiliated
QPAMs) did not receive direct compensation, or knowingly receive
indirect compensation, in connection with the criminal conduct of
Goldman Sachs Malaysia that is the subject of the Goldman Sachs
Malaysia FCPA Conviction. Further, any other party engaged on behalf of
the Goldman QPAMs who had responsibility for, or exercised authority in
connection with the management of plan assets did not receive direct
compensation, or knowingly receive indirect compensation, in connection
with the criminal conduct of Goldman Sachs Malaysia that is the subject
of the Goldman Sachs Malaysia FCPA Conviction;
(c) The Goldman Affiliated QPAMs do not currently and will not in
the future employ or knowingly engage any of the individuals who
participated in the criminal conduct of Goldman Sachs Malaysia that is
the subject of the Goldman Sachs Malaysia FCPA Conviction;
(d) At all times during the Exemption Period, no Goldman Affiliated
QPAM will use its authority or influence to direct an ``investment
fund'' (as defined in PTE 84-14 Section VI(b)) that is subject to ERISA
or the Code and managed by such Goldman Affiliated QPAM with respect to
one or more Covered Plans to enter into any transaction with Goldman
Sachs Malaysia or to engage Goldman Sachs Malaysia to provide any
service to such investment fund, for a direct or indirect fee borne by
such investment fund, regardless of whether such transaction or service
may otherwise be within the scope of relief provided by an
administrative or statutory exemption;
(e) Any failure of a Goldman Affiliated QPAM or a Goldman Related
QPAM to satisfy PTE 84-14 Section I(g) arose solely from the Goldman
Sachs Malaysia FCPA Conviction;
(f) A Goldman Affiliated QPAM or a Goldman Related QPAM did not
exercise authority over the assets of any plan subject to Part 4 of
Title I of ERISA (an ERISA-covered plan) or Code section 4975 (an IRA)
in a manner that it knew or should have known would further the
criminal conduct that is the subject of the Goldman Sachs Malaysia FCPA
Conviction; or cause the Goldman Affiliated QPAM, Related QPAM or its
affiliates to directly or indirectly profit from the criminal conduct
that is the subject of the Goldman Sachs Malaysia FCPA Conviction;
(g) Other than with respect to employee benefit plans maintained or
sponsored for its own employees or the employees of an affiliate,
Goldman Sachs Malaysia will not act as a fiduciary within the meaning
of ERISA section 3(21)(A)(i) or (iii), or Code section 4975(e)(3)(A)
and (C), with respect to ERISA-covered plan and IRA assets; provided,
however, that Goldman Sachs Malaysia will not be treated as violating
the conditions of this exemption, if granted, solely because they acted
as an investment advice fiduciary within the meaning of ERISA section
3(21)(A)(ii) or Code section 4975(e)(3)(B);
(h)(1) Each Goldman Affiliated QPAM must continue to maintain,
adjust to the extent necessary, implement, and follow written policies
and procedures implemented previously in accordance with PTE 2021-02
(the Policies). Future Goldman Affiliated QPAMs have six months to
develop Policies after the
[[Page 16752]]
date they become subject to this exemption. The Policies must require,
and must be reasonably designed to ensure that:
(i) The asset management decisions of the Goldman Affiliated QPAM
are conducted independently of Goldman's corporate management and
business activities, and the corporate management and business
activities of Goldman Sachs Malaysia. This condition does not preclude
a Goldman Affiliated QPAM from receiving publicly available research
and other widely available information from Goldman Sachs Malaysia;
(ii) The Goldman Affiliated QPAM fully complies with ERISA's
fiduciary duties, and with ERISA and the Code's prohibited transaction
provisions, in each case as applicable with respect to each Covered
Plan, and does not knowingly participate in any violation of these
duties and provisions with respect to Covered Plans;
(iii) The Goldman Affiliated QPAM does not knowingly participate in
any other person's violation of ERISA or the Code with respect to
Covered Plans;
(iv) Any filings or statements made by the Goldman Affiliated QPAM
to regulators, including, but not limited to, the Department, the
Department of the Treasury, the Department of Justice, and the Pension
Benefit Guaranty Corporation, on behalf of or in relation to Covered
Plans, are materially accurate and complete, to the best of such QPAM's
knowledge at that time;
(v) To the best of its knowledge at that time, the Goldman
Affiliated QPAM does not make material misrepresentations or omit
material information in its communications with such regulators with
respect to Covered Plans, or make material misrepresentations or omit
material information in its communications with Covered Plans; and
(vi) The Goldman Affiliated QPAM complies with the terms of this
five-year exemption;
(2) Any violation of, or failure to comply with an item in
subparagraphs (h)(1)(ii) through (vi), is corrected as soon as
reasonably possible upon discovery, or as soon after the QPAM
reasonably should have known of the noncompliance (whichever is
earlier), and any such violation or compliance failure not so corrected
is reported, upon the discovery of such failure to so correct, in
writing. This report must be made to the head of compliance and the
general counsel (or their functional equivalent) of the relevant
Goldman Affiliated QPAM that engaged in the violation or failure, and
the independent auditor responsible for reviewing compliance with the
Policies. A Goldman Affiliated QPAM will not be treated as having
failed to develop, implement, maintain, or follow the Policies,
provided that it corrects any instance of noncompliance as soon as
reasonably possible upon discovery, or as soon as reasonably possible
after the Goldman Affiliated QPAM reasonably should have known of the
noncompliance (whichever is earlier), and provided that it adheres to
the reporting requirements set forth in this subparagraph (2); and
(3) Each Goldman Affiliated QPAM must continue to maintain, adjust
(to the extent necessary) and implement a program of training during
the Exemption Period, to be conducted at least annually, for all
relevant Goldman Affiliated QPAM asset/portfolio management, trading,
legal, compliance, and internal audit personnel (the Training). Future
Goldman Affiliated QPAMs have six months to develop the Training after
the date they become subject to this exemption. The Training may be
conducted electronically and must be set forth in the Policies and, at
a minimum, cover the Policies, ERISA and Code compliance (including
applicable fiduciary duties and the prohibited transaction provisions),
ethical conduct, the consequences for not complying with the conditions
of this exemption (including any loss of exemptive relief provided
herein), and prompt reporting of wrongdoing. The Training must be
conducted by a professional who has been prudently selected and who has
appropriate training and proficiency with ERISA and the Code to perform
the tasks required by this exemption;
(i)(1) Each Goldman Affiliated QPAM submits to one audit, to cover
the final twelve months of exemptive relief, ending on June 8, 2031, to
be completed within sixty days thereafter and conducted by a prudently
selected independent auditor with appropriate technical training and
proficiency with ERISA and the Code, to evaluate the adequacy of, and
each Goldman Affiliated QPAM's compliance with, the Policies and
Training. The audit requirement must be incorporated in the Policies.
The corresponding certified Audit Report, as defined below, must be
submitted to the Department no later than 45 days following the
completion of the audit.
(2) Within the scope of the audit and to the extent necessary for
the auditor, in its sole opinion, to complete its audit and comply with
the conditions for relief described herein, and only to the extent the
disclosure is not prevented by state or federal statute, or involves
communications subject to attorney client privilege, each Goldman
Affiliated QPAM and, if applicable, Goldman, will grant the auditor
unconditional access to its business, including, but not limited to:
Its computer systems; business records; transactional data; workplace
locations; training materials; and personnel. Such access is limited to
information relevant to the auditor's objectives as specified by the
terms of this exemption;
(3) The auditor's engagement must specifically require the auditor
to determine whether each Goldman Affiliated QPAM has developed,
implemented, maintained, and followed the Policies in accordance with
the conditions of this exemption, and has developed and implemented the
Training, as required by the terms of this exemption;
(4) The auditor's engagement must specifically require the auditor
to test each Goldman Affiliated QPAM's operational compliance with the
Policies and Training. In this regard, the auditor must test, for each
Goldman Affiliated QPAM, a sample of the Goldman Affiliated QPAM's
transactions involving Covered Plans, sufficient in size and nature to
afford the auditor a reasonable basis to determine such Goldman
Affiliated QPAM's operational compliance with the Policies and
Training;
(5) On or before the end of the relevant period described in
Section III(i)(1) for completing the audit, the auditor must issue a
written report (the Audit Report) to Goldman and the Goldman Affiliated
QPAM to which the audit applies that describes the procedures performed
by the auditor in connection with its examination. The auditor, at its
discretion, may issue a single consolidated Audit Report that covers
all the Goldman Affiliated QPAMs. The Audit Report must include the
auditor's specific determinations regarding:
(i) The adequacy of each Goldman Affiliated QPAM's Policies and
Training; each Goldman Affiliated QPAM's compliance with the Policies
and Training; the need, if any, to strengthen such Policies and
Training; and any instance of the respective Goldman Affiliated QPAM's
noncompliance with the written Policies and Training described in
Section III(h) above. The Goldman Affiliated QPAM must promptly address
any noncompliance. The Goldman Affiliated QPAM must promptly address or
prepare a written plan of action to address any determination as to the
adequacy of the Policies and Training and the auditor's recommendations
(if
[[Page 16753]]
any) with respect to strengthening the Policies and Training of the
respective Goldman Affiliated QPAM. Any action taken or the plan of
action to be taken by the respective Goldman Affiliated QPAM must be
included in an addendum to the Audit Report (such addendum must be
completed prior to the certification described in Section III(i)(7)
below or as soon as practicable thereafter). Any determination by the
auditor that a Goldman Affiliated QPAM has implemented, maintained, and
followed sufficient Policies and Training must not be based solely or
in substantial part on an absence of evidence indicating noncompliance.
In this last regard, any finding that a Goldman Affiliated QPAM has
complied with the requirements under this subparagraph must be based on
evidence that the particular Goldman Affiliated QPAM has actually
implemented, maintained, and followed the Policies and Training
required by this exemption, if granted. Furthermore, the auditor must
not solely rely on the Exemption Report created by the Compliance
Officer, as described in Section III(m) below, as the basis for the
auditor's conclusions in lieu of independent determinations and testing
performed by the auditor as required by Section III(i)(3) and (4)
above; and
(ii) The adequacy of the Exemption Review described in Section
III(m);
(6) The auditor must notify the respective Goldman Affiliated QPAM
of any instance of noncompliance identified by the auditor within five
(5) business days after such noncompliance is identified by the
auditor, regardless of whether the audit has been completed as of that
date;
(7) With respect to the Audit Report, the general counsel or one of
the three most senior executive officers of the Goldman Affiliated QPAM
to which the Audit Report applies, must certify in writing, under
penalty of perjury, that the officer has reviewed the Audit Report and
this exemption, if granted; that, to the best of such officer's
knowledge at the time, the Goldman Affiliated QPAM has addressed,
corrected, and remedied any noncompliance and inadequacy or has an
appropriate written plan to address any inadequacy regarding the
Policies and Training identified in the Audit Report. This
certification must also include the signatory's determination that, to
the best of the officer's knowledge at the time, the Policies and
Training in effect at the time of signing were adequate to ensure
compliance with the conditions of this exemption, and with the
applicable provisions of ERISA and the Code. Notwithstanding the above,
no person, including any person referenced in the Department of
Justice's Statement of Facts that gave rise to the Plea Agreement, who
knew of, or should have known of, or participated in, any misconduct
described in the Statement of Facts, by any party, may provide the
certification required by this paragraph, unless the person took active
documented steps to stop the misconduct;
(8) The Goldman Board of Directors is provided a copy of the Audit
Report; and a senior executive officer of the Audit Committee
established by the Goldman Board of Directors, the general counsel of
the Goldman Sachs Affiliated QPAM to which the Audit Report applies,
one of the three most senior executive officers of the Goldman Sachs
Affiliated QPAM to which the Audit Report applies, or the Chief
Compliance Officer of Goldman Sachs must review the Audit Report for
each Goldman Affiliated QPAM with the Chairperson of the Audit
Committee and must certify in writing, under penalty of perjury, that
such officer has reviewed the Audit Report, that a copy of such Audit
Report was provided to the Board of Directors, and that the Audit
Report was reviewed with and by the Chairperson of the Audit Committee.
Notwithstanding the above, no person, including any person referenced
in the Department of Justice's Statement of Facts that gave rise to the
Plea Agreement, who knew of, or should have known of, or participated
in, any misconduct described in the Statement of Facts, by any party,
may provide the certification required by this paragraph, unless such
person took active documented steps to prohibit the misconduct;
(9) Each Affiliated QPAM must provide its certified Audit Report to
the Office of Exemption Determinations (OED) via email to <a href="/cdn-cgi/l/email-protection#a2c78fede7e6e2c6cdce8cc5cdd4"><span class="__cf_email__" data-cfemail="1a7f37555f5e5a7e7576347d756c">[email protected]</span></a>. This delivery must take place no later than 45 days
following completion of the Audit Report. The Audit Report will be made
part of the public record regarding this exemption. Furthermore, each
Goldman Affiliated QPAM must make its Audit Report unconditionally
available, electronically or otherwise, for examination upon request by
any duly authorized employee or representative of the Department, other
relevant regulators, and any fiduciary of a Covered Plan;
(10) Any engagement agreement with an auditor to perform the audit
required by this exemption must be submitted to OED no later than two
months after the execution of the agreement;
(11) The auditor must provide the Department, upon request, for
inspection and review, access to all the workpapers created and used in
connection with the audit, provided such access and inspection is
otherwise permitted by law; and
(12) Goldman or a Goldman Affiliated QPAM must notify the
Department of a change in the independent auditor no later than two
months after the engagement of a substitute or subsequent auditor and
must provide an explanation for the substitution or change including a
description of any material disputes involving the terminated auditor;
(j) As of the effective date of this five-year exemption, with
respect to any arrangement, agreement, or contract between a Goldman
Affiliated QPAM and a Covered Plan, the Goldman Affiliated QPAM agrees
and warrants to Covered Plans:
(1) To comply with ERISA and the Code, as applicable with respect
to such Covered Plan; to refrain from engaging in prohibited
transactions that are not otherwise exempt (and to promptly correct any
prohibited transactions); and to comply with the standards of prudence
and loyalty set forth in section 404 of ERISA with respect to each such
ERISA-covered plan and IRA to the extent that section 404 is
applicable;
(2) To indemnify and hold harmless the Covered Plan for any actual
losses resulting directly from: a Goldman Affiliated QPAM's violation
of any conditions of this exemption preventing the Goldman Affiliated
QPAM from relying on this exemption, ERISA's fiduciary duties, as
applicable, and of the prohibited transaction provisions of ERISA and
the Code, as applicable; a breach of contract by the QPAM; or any claim
arising out of the failure of such Goldman Affiliated QPAM to qualify
for the exemptive relief provided by PTE 84-14 as a result of a
violation of PTE 84-14 Section I(g), other than the Goldman Sachs
Malaysia FCPA Conviction. The term ``actual losses'' includes, but is
not limited to, losses and related costs arising from unwinding
transactions with third parties and from transitioning Plan assets to
an alternative asset manager as well as costs associated with any
exposure to excise taxes under Code section 4975 as a result of a
QPAM's inability to rely upon the relief in PTE 84-14;
(3) Not to require (or otherwise cause) the Covered Plan to waive,
limit, or qualify the liability of the Goldman Affiliated QPAM for
violating ERISA or the Code or engaging in prohibited transactions;
(4) Not to restrict the ability of such Covered Plan to terminate
or withdraw from its arrangement with the Goldman
[[Page 16754]]
Affiliated QPAM with respect to any investment in a separately managed
account or pooled fund subject to ERISA and managed by such QPAM, with
the exception of reasonable restrictions, appropriately disclosed in
advance, that are specifically designed to ensure equitable treatment
of all investors in a pooled fund in the event such withdrawal or
termination may have adverse consequences for all other investors. In
connection with any such arrangements involving investments in pooled
funds subject to ERISA entered into after the effective date of this
exemption, the adverse consequences must relate to a lack of liquidity
of the underlying assets, valuation issues, or regulatory reasons that
prevent the fund from promptly redeeming an ERISA covered plan's or
IRA's investment, and such restrictions must be applicable to all such
investors and be effective no longer than reasonably necessary to avoid
the adverse consequences;
(5) Not to impose any fees, penalties, or charges for such
termination or withdrawal with the exception of reasonable fees,
appropriately disclosed in advance, that are specifically designed to
prevent generally recognized abusive investment practices or
specifically designed to ensure equitable treatment of all investors in
a pooled fund in the event such withdrawal or termination may have
adverse consequences for all other investors, provided that such fees
are applied consistently and in a like manner to all such investors;
and
(6) Not to include exculpatory provisions disclaiming or otherwise
limiting liability of the Goldman Affiliated QPAM for a violation of
such agreement's terms. To the extent consistent with Section 410 of
ERISA, however, this provision does not prohibit disclaimers for
liability caused by an error, misrepresentation, or misconduct of a
plan fiduciary or other party hired by the plan fiduciary who is
independent of Goldman and its affiliates, or damages arising from acts
outside the control of the Goldman Affiliated QPAM;
(7) Unless already so provided, within four (4) months of the
effective date of this five-year exemption, each Goldman Affiliated
QPAM must provide a notice of its obligations under this Section III(j)
to each Covered Plan. For Covered Plans that enter into a written asset
or investment management agreement with a Goldman Affiliated QPAM on or
after a date that is four (4) months after the effective date of this
exemption, if granted, the Goldman Affiliated QPAM must agree to its
obligations under this Section III(j) in an updated investment
management agreement between the Goldman Affiliated QPAM and such
clients, or other written contractual agreement. Notwithstanding the
above, a Goldman Affiliated QPAM will not violate the condition solely
because a Plan or IRA refuses to sign an updated investment management
agreement.
(k) Unless already so provided, within 60 days of the effective
date of this five-year exemption, each Goldman Affiliated QPAM must
provide a Federal Register copy of the notice of the exemption, along
with a separate summary describing the facts that led to the Goldman
Sachs Malaysia FCPA Conviction (the Summary), which has been submitted
to the Department, with a prominently displayed statement (the
Statement) that the Goldman Sachs Malaysia FCPA Conviction results in a
failure to meet a condition in PTE 84-14, to each sponsor and
beneficial owner of a Covered Plan that has entered into a written
asset or investment management agreement with a Goldman Affiliated
QPAM, or the sponsor of an investment fund in any case where a Goldman
Affiliated QPAM acts as a sub-advisor to the investment fund in which
such ERISA-covered plan and IRA invests. The Summary will be submitted
to OED before it is distributed by each Affiliated QPAM. All
prospective Covered Plan clients that enter into a written asset or
investment management agreement with a Goldman Affiliated QPAM after a
date that is 60 days after the effective date of this exemption must
receive a copy of the notice of the exemption, the Summary, and the
Statement prior to, or contemporaneously with, the Covered Plan's
receipt of a written asset or investment management agreement from the
Goldman Affiliated QPAM. The notices may be delivered electronically
(including by an email that has a link to the five-year exemption);
(l) The Goldman Affiliated QPAMs must comply with each condition of
PTE 84-14, as amended, with the sole exception of the violation of PTE
84-14 Section I(g) that is attributable to the Goldman Sachs Malaysia
FCPA Conviction. If, during the Exemption Period, an entity within the
Goldman corporate structure is convicted of a crime described in PTE
84-14 Section I(g) (other than the Goldman Sachs Malaysia FCPA
Conviction), relief in this exemption, if granted, would terminate
immediately;
(m)(1) Within 60 days after the effective date of this exemption,
each Goldman Affiliated QPAM must designate a senior compliance officer
(the Compliance Officer) who will be responsible for compliance with
the Policies and Training requirements described herein. Each Goldman
Sachs Affiliated QPAM or applicable line of business may designate its
own Compliance Officer(s). Notwithstanding the above, no person,
including any person referenced in the Department of Justice's
Statement of Facts that gave rise to the Plea Agreement, who knew of,
or should have known of, or participated in, any misconduct described
in the Statement of Facts, by any party, may be involved with the
designation or responsibilities required by this condition, unless the
person took active documented steps to stop the misconduct.
(2) The Compliance Officer must conduct a review of each twelve-
month period of the Exemption Period (the Exemption Review), to
determine the adequacy and effectiveness of the implementation of the
Policies and Training. With respect to the Compliance Officer, the
following conditions must be met:
(i) The Compliance Officer must be a professional who has extensive
experience with, and knowledge of, the regulation of financial services
and products, including under ERISA and the Code;
(ii) The Compliance Officer must be: (i) A compliance officer who
regularly reports to the Audit Committee; or (ii) the highest-ranking
compliance officer at the applicable Goldman Sachs Affiliated QPAM or
line of business; and
(iii) The Compliance Officers responsible for the Exemption Review
must provide the Exemption Report to the Auditor within seven (7) days
of completing the report;
(3) With respect to the Exemption Review, the following conditions
must be met:
(i) The Exemption Review includes a review of the Goldman
Affiliated QPAMs' compliance with and effectiveness of the Policies and
Training and of the following: Any compliance matter related to the
Policies or Training that was identified by, or reported to, the
Compliance Officer or the Audit Committee, during the previous year;
the most recent Audit Report issued pursuant to PTE 2021-02 or this
exemption; and any change to ERISA, the Code, or regulations related to
fiduciary duties and the prohibited transaction provisions that may be
applicable to the activities of the Goldman Affiliated QPAMs;
(ii) The Compliance Officer prepares a written report for the
Exemption Review (an Exemption Report) that (A) summarizes his or her
material activities during the prior year; (B) sets forth any
[[Page 16755]]
instance of noncompliance discovered during the prior year, and any
related corrective action; (C) details any change to the Policies or
Training to guard against any similar instance of noncompliance
occurring again; and (D) makes recommendations, as necessary, for
additional training, procedures, monitoring, or additional and/or
changed processes or systems, and management's actions on such
recommendations;
(iii) In the Exemption Report, the Compliance Officer must certify
in writing that to the best of his or her knowledge at the time: (A)
The report is accurate; (B) the Policies and Training are working in a
manner which is reasonably designed to ensure that the Policies and
Training requirements described herein are met; (C) any known instance
of noncompliance during the prior year and any related correction taken
to date have been identified in the Exemption Report; and (D) the
Goldman Affiliated QPAMs have complied with the Policies and Training,
and/or corrected (or are correcting) any known instances of
noncompliance in accordance with Section III(h) above;
(iv) The Exemption Report must be provided to appropriate corporate
officers of Goldman and the Goldman Affiliated QPAM to which such
report relates, and to the head of compliance and the general counsel
(or their functional equivalent) of Goldman Sachs the relevant Goldman
Affiliated QPAM; and the report must be made unconditionally available
to the independent auditor described in Section III(i) above;
(v) The first Exemption Review, including the Compliance Officer's
written Exemption Report, must cover the twelve-month period from June
9, 2026, to June 8, 2027. The next four Exemption Reviews and Exemption
Reports must each cover a twelve-month period that begins on the date
that immediately follows the end of the prior Exemption Review coverage
period. Each Annual Review, including the Compliance Officer's written
Annual Report, must be completed within three months following the end
of the period to which it relates;
(n) Goldman imposes its internal procedures, controls, and
protocols on Goldman Sachs Malaysia to reduce the likelihood of any
recurrence of conduct that is the subject of the Goldman Sachs Malaysia
FCPA Conviction;
(o) Goldman complies in all material respects with the requirements
imposed by a U.S. regulatory authority in connection with the Goldman
Sachs Malaysia FCPA Conviction. Relief in this exemption will terminate
on the date that is one year following the date that a U.S. regulatory
authority makes a final decision that Goldman or an affiliate failed to
comply in all material respects with such requirements;
(p) Each Goldman Affiliated QPAM will maintain records necessary to
demonstrate that the conditions of this exemption have been met for six
years following the date of any transaction for which such Goldman
Affiliated QPAM relies upon the relief in this exemption;
(q) During the Exemption Period, Goldman must: (1) Immediately
disclose to the Department via email addressed to <a href="/cdn-cgi/l/email-protection#06632b4943424662696a28616970"><span class="__cf_email__" data-cfemail="385d15777d7c785c5754165f574e">[email protected]</span></a> any
Deferred Prosecution Agreement (a DPA) or Non-Prosecution Agreement (an
NPA) with the U.S. Department of Justice, entered into by The Goldman
Sachs Group, Inc. or any of its affiliates (as defined in PTE 84-14
Section VI(d)) in connection with conduct described in PTE 84-14
Section I(g) or ERISA section 411; and (2) immediately provide the
Department any information requested by the Department, as permitted by
law, regarding the agreement and/or conduct and allegations that led to
the agreement; and
(s) A Goldman Affiliated QPAM will not fail to meet the terms of
this five-year exemption, if granted, solely because a different
Goldman Affiliated QPAM fails to satisfy a condition for relief
described in Sections I(c), (d), (h), (i), (j), (k), the first sentence
of (l), (m), or (p); or if the independent auditor described in Section
III(i) fails a provision of the exemption other than the requirement
described in Section III(i)(11), provided that such failure did not
result from any actions or inactions of Goldman or its affiliates.
Applicability Date: If granted, this exemption will be in effect
for the period beginning on June 9, 2026, through June 8, 2031.
Signed at Washington, DC, this 26th day of March, 2026.
Warren Blinder,
Chief, Division of Individual Exemptions, Office of Exemption
Determinations, Employee Benefits Security Administration, U.S.
Department of Labor.
[FR Doc. 2026-06408 Filed 4-1-26; 8:45 am]
BILLING CODE 4510-29-P
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</html>Indexed from Federal Register on April 2, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.