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the Trustee needs BICE only if it is making investment recommendations and earns transaction-based compensation as a result of those recommendations.  If that is the case I suppose it can use BICE but then how is it a "directed trustee"? 

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4 hours ago, jpod said:

the Trustee needs BICE only if it is making investment recommendations and earns transaction-based compensation as a result of those recommendations.  If that is the case I suppose it can use BICE but then how is it a "directed trustee"? 

I guess you could be a directed trustee but take  an action that would be a fiduciary action (See OPs earlier question on education vs advice).

But to rely on BICE, I think you would have to accept that you are a fiduciary but fulfill the requirements of the BICE and be exempt, I don't think it can function as a backstop while claiming that you are not a fiduciary...

 

 

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The directed trustee IS a fiduciary because of the inherent fiduciary responsibilities of any trustee (at least that is the longstanding DOL position), but that doesn't mean it is an "investment advice" fiduciary, and BICE is needed and relevant only if it is a fiduciary in that capacity. 

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  • 1 month later...

Sorry I hadn't been back to check on this.  I was asking in the context of recordkeepers today who serve as a "Directed Trustee" and who I have been seeing using ways (I was guessing) within the BICE exemption to keep their current revenue sharing arrangements that contain potential conflict-of-interest arrangements.  They are sending out a "no-response" client letter saying the contract will remain in-effect.  Therefore, the plan sponsor remains liable.   Just trying to figure out how else these large companies are able to do this other than through the BICE exemption within the DOL rule.

Thanks in advance for all of your feedback/comments...

 

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