U.S. Proposes Pension-Fund Clearance for Citi, Others

  • Barclays, Deutsche Bank, JPMorgan, UBS in line for waivers
  • Democrats pushed for tough review of banks accused of crimes

The U.S. Labor Department proposed granting temporary permission to five banks to continue managing certain U.S. pension funds after convictions of the banks or their units, potentially allowing the banks to move beyond their legal troubles over objections by some Democratic lawmakers.

The department proposed so-called Qualified Professional Asset Manager waivers of one year to JPMorgan Chase & Co., Citigroup Inc., Deutsche Bank AG, Barclays Plc and UBS Group AG, according to the Federal Register.

The one-year waivers, designed to give the Labor Department more time to consider granting longer waivers, will go into effect after a brief comment period, the Labor Department clarified in an e-mail on Monday. UBS has a five-day comment period, while the other banks have seven days. The Labor Department has proposed granting the banks five-year waivers, which would become effective after a 45-day comment period, just before the Trump administration is to take over the government on Jan. 20.

“We take the ongoing process very seriously and firmly believe that the information we have provided to the Department of Labor supports the granting of a continuing exemption to allow us to serve our U.S. pension plan clients without disruption to them,” Peter Stack, a spokesman for UBS, said by e-mail.

Representatives of the other banks declined to comment.

Retirement Plans

The business activity covered by the waivers includes 401(k) plans and corporate pensions, among other retirement plans. Any institution or individual that manages pensions overseen by the Labor Department must seek permission to continue those operations after certain criminal convictions. The five banks were found guilty of violations that included interest-rate or currency manipulation.

Regulatory waivers have become politically fraught over the last two years, with lawmakers including Senator Elizabeth Warren, a Massachusetts Democrat, and Representative Maxine Waters, a California Democrat, pressing the Labor Department, which oversees about $8 trillion in private-sector pensions, for tougher reviews of banks accused of crimes before clearing them to continue their pension-management businesses.

The U.S. Securities and Exchange Commission, which issues its own waivers for certain securities activities, isn’t inclined to use the process as an additional enforcement tool, SEC Chair Mary Jo White said last year.

(Corrects third paragraph to say proposed waivers have brief review periods.)
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