Retirement Plans Newsletter

BULLETIN
June 29, 2020

BenefitsLink.com logo
EmployeeBenefitsJobs.com logo
Get Health & Welfare News   ·   Get Message Boards Digest   ·   Past Issues   ·   Search
 

[Official Guidance]

Text of DOL Notice of Proposed Class Exemption: Improving Investment Advice for Workers & Retirees (PDF)

123 pages. "This proposed exemption would allow investment advice fiduciaries under both ERISA and the Code to receive compensation, including as a result of advice to roll over assets from a Plan to an IRA, and to engage in principal transactions, that would otherwise violate the prohibited transaction provisions of ERISA and the Code. The exemption would apply to registered investment advisers, broker-dealers, banks, insurance companies, and their employees, agents, and representatives that are investment advice fiduciaries. The exemption would include protective conditions designed to safeguard the interests of Plans, participants and beneficiaries, and IRA owners. The new class exemption would affect participants and beneficiaries of Plans, IRA owners, and fiduciaries with respect to such Plans and IRAs."

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

[Official Guidance]

Text of DOL Final Regs: Conflict of Interest Rule -- Retirement Investment Advice: Notice of Court Vacatur (PDF)

21 pages. "This document implements the vacatur of the Department's 2016 final rule defining who is a 'fiduciary' under [ERISA] and the Internal Revenue Code ... and reinstates the regulation at 29 CFR 2510.3-21 as it existed before being amended by the 2016 final rule. This document also reflects the removal of two prohibited transaction exemptions (PTEs 2016-01 and 2016-02) published with the 2016 final rule and the return of the amended prohibited transaction exemptions (PTEs 75-1, 77-4, 80-83, 83-1, 84-24, and 86-128) to their pre-amendment form. In addition, this document reinstates in the CFR Interpretive Bulletin 96 -1, which had been removed and largely incorporated into the text of the 2016 final rule. These revisions are ministerial to conform the contents of the Code of Federal Regs and the text of the Department's prohibited transaction exemptions to the vacatur ordered by the United States Court of Appeals for the Fifth Circuit on June 21, 2018, in Chamber of Commerce v. DOL[.]"

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

[Guidance Overview]

Text of DOL Fact Sheet: Improving Investment Advice for Workers and Retirees

  • "The Department proposed a new prohibited transaction class exemption that would be available for investment advice fiduciaries and has submitted it to the Federal Register for publication.
  • "The Department has submitted a technical amendment to conform the text of the Code of Federal Regs to a 2018 decision by the U.S. Court of Appeals for the 5th Circuit. That decision vacated the Department's 2016 fiduciary rule and the exemptions that accompanied the rule, which had the effect of reinstating the previous regulatory text, including the 1975 regulation and its five-part test for defining an investment-advice fiduciary as well as Interpretive Bulletin 96-1 regarding participant investment education.
  • "The Department has updated its website to reflect changes to its pre-existing prohibited transaction class exemptions to reflect the court's vacatur of the 2016 rulemaking.
    • "Two class exemptions that were newly granted in 2016 -- the Best Interest Contract Exemption and the Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs -- are removed.
    • "Pre-existing class exemptions that were amended in 2016 have reverted to their pre-amendment form. This includes Prohibited Transaction Exemptions (PTEs) 75-1, 77-4, 80-83, 83-1, 84-24 and 86-128."

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

[Guidance Overview]

DOL Proposes to Improve Investment Advice and Enhance Financial Choices for Workers and Retirees

"The proposed exemption offers a new prohibited transaction class exemption for investment advice fiduciaries and is based on an existing temporary policy adopted after the 5th Circuit Court of Appeals vacated the Department's 2016 fiduciary rule package. The proposal would allow investment advice fiduciaries to give more choices for retirement using Impartial Conduct Standards. Impartial Conduct Standards are a best interest standard; a reasonable compensation standard; and a requirement to make no materially misleading statements. Since the 5th Circuit's ruling in 2018, the [SEC] has issued a package of advice standards. The standards in the Department's proposed exemption announced today align with standards of other regulators, including the SEC. Together, the actions of the SEC and the [DOL] will strengthen retirement security for Americans.

"The proposed exemption also expresses the Department's views on when rollover advice could be considered fiduciary advice under [ERISA] and the Internal Revenue Code.

"The Department is also taking the ministerial action of amending the Code of Federal Regs to implement the 5th Circuit's order. The court's order had the effect of reinstating the Department's 1975 regulation defining who is an investment advice fiduciary under ERISA and the Code, commonly known as the 'five-part test.' The court's order also had the effect of reinstating the Department's Interpretive Bulletin 96-1 regarding participant investment education."

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

Lois Baker, J.D., President  loisbaker@benefitslink.com
David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
Holly Horton, Business Manager  hollyhorton@benefitslink.com

Article submission: Online form, or email to news.editor@benefitslink.com

BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2020 BenefitsLink.com, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

Links to web sites other than BenefitsLink.com and EmployeeBenefitsJobs.com are offered as a service to our readers; we were not involved in their production and are not responsible for their content.

Unsubscribe  |   Change Email Address  |   Privacy Policy