Recently, NAFA’s Government Relations Committee (GRC) worked diligently to develop a document summarizing Prohibited Transaction Exemption (PTE) 84-24 and its current application. Given that the Department of Labor’s proposed fiduciary duty rule would amend and partially revoke PTE 84-24, it’s critical that NAFA members understand this exemption, how it would change under the proposed rule and how that may impact the fixed annuity marketplace.

Whitepaper excerpt:

Why we should be interested in understanding PTE 84-24

Even though PTE 84-24 has been around since 1977 (and was most recently amended in 2006), the fixed annuity industry has not needed to consider utilizing this exemption because we have not been considered fiduciaries pursuant to the current, 5-prong definition of fiduciary under 29 CFR 2510.3-21. However, under the DOL proposed fiduciary rule, the base definition of who is considered to be a “fiduciary” is greatly expanded: if the proposed rule goes through as currently written, fiduciary status and duties would be triggered for almost all annuity contract transactions involving ERISA plans and IRAs. And, once a fiduciary, annuity sellers will need to utilize this exemption.

>> Read the full summation here.

>> Or, visit our Advocacy Update page for a summary of events related to the Department of Labor’s proposed fiduciary duty rule.