In-House Asset Manager (INHAM) | Practical Law

In-House Asset Manager (INHAM) | Practical Law

In-House Asset Manager (INHAM)

In-House Asset Manager (INHAM)

Practical Law Glossary Item 6-505-6395 (Approx. 3 pages)

Glossary

In-House Asset Manager (INHAM)

In the context of employee benefit plans, one of the following:
  • An organization that is either:
    • a direct or indirect 80% or more owned subsidiary of an employer, or a direct or indirect 80% or more owned subsidiary of a parent organization of that employer; or
    • a membership nonprofit corporation a majority of whose members are officers or directors of that employer or parent organization.
  • A registered investment advisor that manages and controls total assets attributable to plans maintained by its affiliates in excess of $50 million, calculated as of the last day of its most recent fiscal year. If the advisor has no previous fiscal year because it was previously a division or group within the employer's organizational structure, then the $50 million requirement is deemed met on the date in its first fiscal year as a separate legal entity when the advisor became responsible for managing assets over $50 million. Effective as of the last day of the investment advisor's first fiscal year beginning on or after April 1, 2011, the $50 million asset under management requirement increases to $85 million.
The qualifications for an INHAM are found in Prohibited Transaction Class Exemption 96-23, issued by the Department of Labor, and the Amendment to this Exemption published on April 11, 2011 (INHAM Exemption). Absent an exemption, the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 generally prohibit transactions between a plan and a disqualified person. If a plan's in-house investment manager qualifies as an INHAM and meets several strict conditions under the INHAM Exemption, a broad range of prohibited transactions will be permitted.