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December 19, 2005
Pension legislation loosens hedge fund rules
The House pension bill passed Thursday included a string of provisions that would enable hedge funds to invest double the existing level of pension assets without being subject to the federal pension regulations. The legislation would allow hedge funds to take 50% of total assets — from 25% — from pension plans without being subject to the fiduciary provisions of the Employee Retirement Income Security Act. The provision had already passed the House Education and the Workforce Committee in June.
“It’s a relief,” said Liz Varley, a lobbyist for the Securities Industry Association, Washington, which had lobbied hard for inclusion of the provisions in the pension legislation.
- Advertisement -“If enacted, this legislation will go a long way toward modernizing our nation’s pension laws, giving pension plans access to enhanced investment tools for the benefit of plan participants,” Scott Parsons, executive vice president of the Managed Funds Association, Washington.
But officials at the AFL-CIO, Washington, hope the provision, as well as other provisions that would water down conflict-of-interest rules in ERISA, will be removed from final legislation that emerges from House-Senate negotiations. “A number of these provisions are particularly problematic because of the damage that they do to ERISA’s protections for workers’ retirement money,” said Shaun O’Brien, a senior policy analyst. “The Senate took a much more well-reasoned approach to these issues, and we certainly hope that they will prevail in conference.”
-Pensions & Investments online-
Posted by su at December 19, 2005 12:11 PM