Compliance

DOL Fiduciary Rule FAQ Further Clarifies Compliance Demands

By John Manganaro editors@plansponsor.com | August 04, 2017
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Per item two—whether recommendations to plan participants and IRA owners to contribute to or increase contributions to a plan or IRA constitute fiduciary investment advice under the fiduciary rule—DOL says generally the answer is “No.”

“The fiduciary rule generally does not treat communications ‘about the benefits of plan or IRA participation, [and] the benefits of increasing plan or IRA contributions’ as fiduciary investment advice, provided that the information and materials do not include recommendations with respect to specific investment products or recommendations with respect to investment management of a particular security or other investment property,” the FAQ reads. The document also provides illustrative examples of such communications that would not constitute fiduciary investment advice under the fiduciary rule.

Finally, on the third matter—whether it would it be investment advice under the fiduciary rule if a person makes recommendations or suggestions to a plan administrator or other plan fiduciary relating to methods to increase employees’ participation in, or level of contributions to, an ERISA plan—DOL again says this is not the case.

“Provided that the information and materials do not include recommendations with respect to specific investment products or recommendations with respect to investment management of a particular security or other investment property, the department would not view such communications as investment advice recommendations within the meaning of the fiduciary rule even in cases in which the recommendation is based on specific attributes of the plan or its demographics, such as correlations between participation or contribution rates and specific participant attributes.”

The full FAQ is available for download here

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