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Application of Fiduciary Rule to Governmental Plans

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It has been my understanding that the new fiduciary rule issued by the DOL applies only to ERISA plans and IRAs (if and when it actually goes into effect).  As such, governmental plans and church plans would generally be exempt.  However, I recently came across the assertion (here) that money rolled over from an ERISA plan into a governmental plan would continue to be subject to the new fiduciary rules.  Has anyone else seen this interpretation of the new rules?  I can't find anything else to support the author's position.

(By the way, I do understand that advice regarding whether to roll funds between a governmental plan and an ERISA plan or IRA would be advice subject to these rules.  The article raises a separate issue by suggesting that the rolled funds would be subject to the new rules while in the hands of the governmental plan.)

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I express no view about whether 29 C.F.R. § 2510.3-21 applies to discern whether a person is a fiduciary regarding any portion of amounts held under a governmental plan.

 

If ERISA does not govern a plan (and does not preempt State law), States’ laws could impose standards of care.  While those standards could be more flexible than ERISA, they also could be similar to, or even stricter than, ERISA.

 

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The Rule does not apply to advice to a governmental plan participant about taking a distribution and/or rolling to an IRA or an ERISA plan.

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jpod, after rereading the rule, I agree that it specifically references "recommendations with respect to rollovers, transfers or distributions from a [covered] plan or IRA."

However, it's worth noting that there seem to be a number of commentaries that take the position that the rule does apply to advice regarding whether to roll amounts from a governmental plan to an ERISA plan or IRA.  See, for instance, this powerpoint from the National Association of Governmental Defined Contribution Administrators (specifically slides 9 and 21):  https://benefitslink.com/news/index.cgi/view/20161215-132301

Thoughts?

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I haven't looked at the slides, but if they say what you say they say I don't see how that could be correct.

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jpod, if that's the case, then I assume that you would agree with me that the assertion in the article cited in my original post (i.e., that money rolled from an ERISA Plan into a governmental plan continues to be subject to the new rule in the hands of the governmental plan) is also incorrect?

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Yes, I would agree that assertion is incorrect.

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