Nonenforcement Policies: Some of the DOL’s Prohibited Transaction Exemptions Apply Now

In a coauthored article for PLANADVISER, benefits and executive compensation partner Fred Reish and counsel Joan Neri explain how the Department of Labor’s (DOL) extended nonenforcement policy of Prohibited Transaction Exemption (PTE) 2020-02 will affect registered investment advisers (RIAs).

The authors outline the DOL’s policy not to enforce the PTE until Jan. 31, 2022, as well as its nonenforcement approach to the specific documentation and disclosure requirements for rollovers until June 30, 2022. They also detail limitations on the extension and describe what the standards require.

In conclusion, Neri and Reish say that the extended nonenforcement policy provides additional time to meet the conditions of the PTE, but some practices need to be in place now. For rollover recommendations, they emphasize engaging in a best interest process to satisfy one’s fiduciary duty under ERISA and to comply with the impartial conduct standards, which are a condition for the protection the policy affords.

The full article is available for PLANADVISER subscribers.