In 2020, the Department of Labor (DOL) issued its Prohibited Transaction Exemption (PTE) 2020-02 to provide an exemption to most prohibited transactions resulting from nondiscretionary fiduciary advice to retirement plans governed by either ERISA or the Internal Revenue Code, or both, as well as nondiscretionary fiduciary advice to IRAs. The
Each calendar quarter, I post approximately 12 articles on my blog, fredreish.com. This quarterly digest provides links to the most popular posts during the past three months so that you can catch up on what you missed or re-read them. A Rollover Recommendation is a Securities Recommendation The Department of
Key Takeaways Where an investment adviser charges different fees for managing fixed income in a portfolio than for managing equities, and has discretion to determine the allocation between the two in an IRA, the investment adviser has control over its fees, which appears to violate a prohibited transaction provision in
Key Takeaways The Department of Labor considers a rollover recommendation to be a recommendation to liquidate the investments in a participant’s 401(k) account or to transfer (and change) securities. In addition, as explained in earlier articles, the DOL considers a plan-to-IRA rollover to be a change of account type, e.g.,
Key Takeaways Recent SEC guidance has clarified that the investment adviser duties of care and loyalty are separate, independent duties. A reasonable interpretation of the SEC and Staff guidance is that the satisfaction of one will not satisfy the other–both must be individually satisfied. As a result, the SEC appears
Key Takeaways The DOL’s expanded definition of fiduciary advice is explained in the preamble to PTE 2020-02. When conflicted fiduciary advice is given to retirement investors, that is, retirement plans, participants (including rollovers), and IRA owners (including transfers of IRAs), it results in prohibited transactions under the Internal Revenue Code
Key Takeaways The DOL’s expanded definition of fiduciary advice is explained in the preamble to PTE 2020-02. When conflicted fiduciary advice is given to retirement investors (that is, retirement plans, participants (including rollovers), and IRA owners (including transfers of IRAs), it results in prohibited transactions under the Internal Revenue Code
Key Takeaways The DOL’s expanded definition of fiduciary advice to retirement plans, participants, and IRAs was described in the preamble to PTE 2020-02. The PTE then provides relief for conflicted non-discretionary recommendations to retirement investors (for example, rollover recommendations), if its conditions are satisfied. One of the conditions for relief
Key Takeaways The DOL’s expanded definition of fiduciary advice is described in the preamble to PTE 2020-02. When conflicted fiduciary advice is given to retirement investors (that is, retirement plans, participants (including rollovers), and IRA owners), it results in prohibited transactions under the Internal Revenue Code and ERISA. But the
Key Takeaways The DOL’s expanded interpretation of fiduciary advice is described in the preamble to Prohibited Transaction Exemption (PTE) 2020-02. The expanded interpretation applies to all rollover recommendations, including recommendations to rollover into annuities. A fiduciary rollover recommendation to rollover from an ERISA-governed retirement plan results in a conflict of
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