RIA Compliance Consultants has released a new sample form, Annual Review – Certification of Annual Retrospective Review of IRA Rollover.
Category Archives: DOL
Fiduciary Advice Exemption Enforcement for PTE 2020-02 Now in Effect for Investment Advisers
February 01, 2022
As of February 1, 2022, the U.S. Department of Labor (“DoL”) will begin enforcing PTE 2020-02, a fiduciary advice prohibited transaction exemption that applies to IRA rollovers. Previously, the DoL had issued a temporary enforcement policy in Field Assistance Bulletin 2018-02 indicating that the DoL would not pursue enforcement claims related to prohibited transaction claims so long as an investment adviser could demonstrate that it was complying with the Impartial Conduct Standards “in good faith and with reasonable diligence.” The temporary enforcement policy ended on January 31, 2022.
Investment adviser firms advising plan participants on IRA rollovers should review the recently published guidance of the U.S. Department of Labor (“DoL”) regarding PTE 2020-02, a new fiduciary advice prohibited transaction exemption. Compliance with PTE 2020-02 now permits investment advisers to provide advice regarding IRA rollovers without violating Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA), and the Internal Revenue Code of 1986 (“IRC”), both of which prohibit investment advisers from receiving payments that create a conflict of interest when providing fiduciary investment advice to plan sponsors, plan participants, and IRA owners. The adoption of PTE 2020-02 follows several years of rulemaking, court actions, and DoL guidance regarding the definition of fiduciary investment advice and clarifies that advice regarding IRA rollovers is considered a fiduciary activity, in contrast to the DoL’s prior interpretation.
OMB Approves Request for DoL Fiduciary Rule Delay
August 31, 2017
The U.S. Office of Management and Budget (“OMB”) recently approved a request by the U.S. Department of Labor (“DoL”) that seeks to postpone implementation of the final portion of the DoL’s controversial fiduciary rule. Originally scheduled to go into effect January 1, 2018, this newest proposal by the DoL would see the fiduciary rule delayed eighteen more months, until July 1, 2019. Click here to view the regulatory review update on the OMB’s website.
DoL Proposes Fiduciary Rule Delay
August 11, 2017
The United States Department of Labor (“DoL”) indicated in a court filing yesterday, August 9, 2017, that it would be seeking an eighteen-month delay in implementing the second phase of the fiduciary rule. This phase, originally scheduled to go into effect on January 1, 2018, would require investment advisers who receive variable compensation to comply with the Best Interest Contract Exemption (“BICE”). A signature feature of the Fiduciary Rule, BICE permits investment advisers to receive variable compensation only if they sign a contract with clients promising to put the clients’ interest before their own. The second phase also implements exemptions for principal transactions and insurance agents.
Department of Labor Fiduciary Rule – August FAQs
August 09, 2017
The United States Department of Labor (“DoL”) recently released the latest round of Frequently Asked Questions for the Department’s new Fiduciary Rule. Containing only three sets of questions and answers, the release clarifies issues relating to 408(b)(2) defined contribution plans and other retirement plan advisors. Click here to read the DOL’s August FAQs.
The U.S. Department of Labor (“DoL”) recently confirmed that it would not seek to extend the Fiduciary Rule delay. Originally scheduled to go into effect on April 10, 2017, the DoL issued a rule delay earlier this year postponing the applicability date to June 9, 2017 pending a review of the rule ordered by U.S. President Donald Trump. Until this week, it was unclear whether the rule would go into effect on June 9 or be subject to further delay.
The U.S. Department of Labor (“DOL”) recently announced a new proposal to provide a web-based tool for ERISA covered retirement plans to report violations of the new 408(b)(2) disclosure requirements. Under the new 408(b)(2) regulations, as of July 1, 2012 ERISA covered service providers were required to provide retirement plans, to which they provide services, with certain disclosures. Failure to provide the required disclosures will result in services to the ERISA covered plan being classified as a prohibited transaction under ERISA and the Internal Revenue Code. The purpose of the new tool is to assist plan sponsors in determining whether they have all the required information and to provide an easy way for plan sponsors to report service providers who fail to make the required 408(b)(2) disclosures.
Dale Brown, President and CEO of the Financial Services Institute (“FSI”), wrote a letter to Representative John Kline, (R – MN) Chairman of the U.S. House Education and Workforce Committee and to ranking member George Miller, (D – CA) in response to comments made by Phyllis Borzi, Assistant Secretary of the Department of Labor, (“DOL”) in a letter to the same members of the Committee. Borzi told the ranking members she was disappointed with the lack of participation in the DOL’s request for data as part of its “effort to expand the definition of fiduciary under the Employee Retirement Income Security Act of 1974 (“ERISA”).”In Brown’s letter he is critical of DOL Assistant Secretary Borzi for what he calls an impractical request.