Fiduciary Rule

[Scuba 401]

does anyone think or know whether the fiduciary rule includes a duty to monitor IRA service providers that might take rollovers from plan participants?  I am having a disagreement with a colleague. i say there is no duty to monitor IRA advisors who deal with participants.   

[Soundbc1]

As far as I can tell the responsibility is on the service providers to document they discussed/ determined it was in the best interest of the participant to roll to an IRA.  The plan sponsor would not have the necessary information to make determinations if the IRA service provider was acting in the best interest of the participant.  The participant would need to hand over personal/private information to the plan that the plan sponsor/trustee has no right to demand.

[Carol V. Calhoun]

I don't think the employer has such an obligation.  An adviser that advises participants on whether to take a rollover has an obligation to make sure such advice is prudent.  However, the employer has no continuing obligation once the money leaves the plan.

[My 2 cents]

The service providers would presumably just provide the necessary information and a form permitting the participant to elect to roll the money over to an IRA.  This would not represent a recommendation to roll the money over, and (one presumes) they would not be recommending a specific IRA in any event.  Those who do make such recommendations are the people who should perhaps be worrying whether that makes them fiduciaries.  Isn't the idea to make it so that the people suggesting investments are not being self-serving in doing so?

The employer may have some responsibility in selecting a default IRA provider but otherwise one presumes that the wise employer will not otherwise be trying to push people to cash out of the plan (unless mandated by the terms of the plan) or where to put the money.

[Scuba 401]

ok so now another question - i have been receiving negative consent documents from so providers concerning the sophisticated fiduciary exception. are there any documents that need to go out to clients during the transition period  if you have always been a fiduciary to the plan and accepted fiduciary status in your service agreement and aren't changing anything in connection with the rule?