The Best Interest Process for Plan-to-IRA Rollover Recommendations under the DOLs New Fiduciary Rule

The September 23, 2024, effective date of the Department of Labor's (DOL) new fiduciary definition for advice provided to private sector retirement plans, participants in those plans, and individual retirement account (IRA) owners (the New Fiduciary Rule) has been stayed. [...]the DOLs current...

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Veröffentlicht in:Journal of pension benefits 2024-10, Vol.32 (1), p.2-7
Hauptverfasser: Reish, Fred, Neri, Joan, Waldbeseb, Joshua
Format: Artikel
Sprache:eng
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Zusammenfassung:The September 23, 2024, effective date of the Department of Labor's (DOL) new fiduciary definition for advice provided to private sector retirement plans, participants in those plans, and individual retirement account (IRA) owners (the New Fiduciary Rule) has been stayed. [...]the DOLs current DOL fiduciary rule remains in effect-at least He has been recognized as one of the "Legends" of the retirement industry by both PlanAdviser and PlanSponsor magazines. Fiduciary recommendations that are conflicted-for example, where advisors receive compensation as a result of a recommendation-are prohibited transactions under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (Code). [...]advisors will need to rely on Prohibited Transaction Exemption (PTE) 2020-02 and satisfy its conditions, in order to avoid engaging in a prohibited transaction. [Staff Bulletin: Standards of Conduct for Broker-Dealers and Investment Advisers Account Recommendations for Retail Investors Q&A-2a] Therefore, in the view of both the DOL and the SEC, the best interest process is not a one- size-fits-all approach, bur insread requires that the advisor consider what is important for satisfying that particular investor's needs, for example, asset allocation services, active management, periodic withdrawals, sustainable income, etc. [...]the advisor will need to gather sufficient information from the investor to ensure that the recommendation is not based on incomplete or materially inaccurate information.
ISSN:1069-4064