The U.S. Department of Labor’s new “Fiduciary Rule” went into effect on Tuesday, February 16th. The “Improving Investment Advice for Worker & Retirees,” an exemption for investment advice fiduciaries, was published in the Federal Register in December 2020 and was not delayed by the Biden Administration.
According to a press release from Deputy Assistant Secretary of Labor for the Employee Benefits Security Administration Ali Khawar, the DOL will release guidance for retirement investors, employee benefit plans, and investment advice providers in the coming days.
“This exemption allows for important investor protections, including a stringent ‘best interest’ standard of care for fiduciary recommendations of rollovers from ERISA-protected retirement accounts. We recognize that investment advice providers have been preparing for the exemption, and this step will allow them to implement important system changes. That said, we will continue our stakeholder outreach to determine how we might improve this exemption, the rule defining who is an investment advice fiduciary, and related exemptions to build on this approach.”
The rule is laid out in a 200+ page document that involves several complex components. This means many producers will be scrambling to keep up with the changes brought about by the changes. The new rule applies to all qualified money sales, including annuity and life insurance, along with all ERISA and IRA plans, and recommendations to roll out of those plans. Without digging into intricacies, one of the main takeaways from the new rule is found in the pathways to compliance.
Streamlined Pathway to Compliance
Failing to comply with the new rule could jeopardize the tax-qualified status of any IRA or ERISA plans you’ve discussed with clients. The most streamlined pathway to compliance for qualified annuity and life insurance sales is the PTE 84-24 form. Unlike the more complex and involved PTE 2020-02, PTE 84-24 requirements can be met with a single form that you must keep on file for six years.
Because the DOL did not confirm the new rule would go into effect as scheduled until days before the February 16th enactment date, many agents and advisors were caught ill-prepared for compliance. If you were caught off-guard, IAMS is here to help.
Our marketing and executive team is on hand with the information you need to keep writing business and servicing your clients. We have also created a sample PTE 84-24 form that you can use in your practice right away. IAMS also has the ability to attach the completed form to your casework documents so you meet the six-year record-keeping requirement.
Avoid putting your clients’ finances at risk through non-compliance and get in touch with our team for assistance. For questions about the new rule and to access a free copy of the PTE 84-24 form, call IAMS today at (800) 255-5055.
IAMS is also hosting a webinar that goes in-depth on the new rule and what you need to know about meeting requirements. Join IAMS’ Curtis Hawks, CMO, and Chris Conroy, General Counsel, for an insightful overview of this new rule, who’s covered by it, and how to comply. The webinar is scheduled for Wednesday, February 24th at 12 PM CST.
Highlights to include:
- The 2020 “Fiduciary Rule” Nuts & Bolts
- What’s Covered under DOL’s new Final Interpretation
- PTE 84-24 Compliance Pathway
- Anticipated Carrier Compliance Plans
- IAMS Compliance Resources
Don’t get caught in a compliance trap – know the rules and be ready to comply. We have limited availability for this exclusive webinar- so sign up now to ensure you are registered.