DOL Fiduciary Rule Update on Rollovers Postponed to January 31, 2020

Under the Department of Labor’s (DOL) new policies, all producers (agents) that rollover funds from a  Individual Retirement Account (IRA), Pension or other similar plans to an IRA annuity or other Defined Contribution/Benefit plans must meet the 5-part test under the Prohibited Transaction Exemption (PTE).  Those requirements can be found in PTE84-24 put out by DOL.  Each individual doing a rollover will be provided with a Producer Compensation Disclosure document.

The Impartial Conduct Standards require that:

The advice provided by the producer must be in the “best Interest” of the retirement client.  This best interest has two chief components: Prudence and Loyalty:

  1. Under the prudence standard, the advice must meet a professional standard of care, and
  2. Under the loyalty standard, the advice must be based on the interest of the client rather than the competing financial interest of the producer or firm;
  3. No more than reasonable compensation can be charged or received by the producer or firm, and
  4. The Producer may not make any misleading statements about the investment transactions, product, compensation, or any conflicts of interest.