July/August 2021

Now a Fiduciary: A Prudent Process for Rollover Advice


Benefits and executive compensation partner Fred Reish and counsel Joan Neri co-authored a PLANADVISER article on the impact of the Department of Labor’s (DOL) expanded interpretation of fiduciary advice on rollover recommendations, particularly for registered investment advisers (RIAs).

In the Q&A article, an RIA, who provides advisory services to individuals, said, “If I recommend that an individual roll over plan monies to an individual retirement account I manage, I am considered an Employee Retirement Income Security Act (ERISA) fiduciary under the DOL’s expanded interpretation of fiduciary advice. This means I need to satisfy ERISA’s fiduciary standard of care and comply with the best interest standard under DOL prohibited transaction exemption (PTE) 2020-02 to avoid a prohibited transaction. What does DOL guidance say about the process I need to undertake to satisfy this standard of conduct?

In response, Reish and Neri discussed the highlights of the DOL’s frequently asked questions and shared factors that should be evaluated considering the participant’s needs and circumstances to determine which alternative is in their best interest.

In conclusion, the authors stated that RIAs need to develop a rollover process that accounts for the factors and considerations identified by the DOL. RIAs will also need to establish policies and procedures that support compliance with the process and satisfy the other conditions in PTE 2020-02.

The full article is available for PLANADVISER subscribers.

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