February 16, 2021

The Wall Street Journal Seeks Insight From Fred Reish About Possible Impact of Labor Department Regulation on 401(K) Rollovers

In “New Rule on 401(k) Rollovers Takes Effect, as Biden Sticks With Trump-Era Change,” benefits and executive compensation partner Fred Reish spoke to The Wall Street Journal about the potential impact of the Labor Department’s decision to build upon a Trump administration regulation governing advice that affects the trillions of dollars in retirement accounts rather than replace it.

According to The Wall Street Journal, the measure will cause many rollovers, in which hundreds of billions of dollars move annually from 401(k)s to individual retirement accounts, to be more heavily regulated. It also gives investors who feel they have been given bad rollover advice the right to file a lawsuit or arbitration claim.

The regulation will hold advisers to IRA owners to a higher standard when it comes to managing conflicts of interest, including those that arise in the sale of products such as variable annuities that pay commissions or other sales incentives, said Reish, who focuses on employee benefits. “It will significantly reduce incentives that would cause the advisers to make bad recommendations,” he added.

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