The DOL’s Retirement Security Rule: A Summary Guide for Independent Distribution

With the exception of the two years that Fiduciary Rule 2.0 was in place from 2016 to 2018, a one-time rollover recommendation to purchase an annuity to a plan participant or IRA owner has been generally understood to not be subject to a fiduciary standard. This has been the case for decades.

Effective Sept. 25, 2024, things are changing. The DOL’s Retirement Security Rule is set to take effect, a regulatory regime in which ERISA’s five-part test used to determine fiduciary status is significantly broadened, creating a regime in which nearly all qualified retirement advice activity falls under a fiduciary standard — with all the attendant requirements, obligations and liabilities that the standard entails. Annuity professionals making rollover recommendations will be required to use a prohibited transaction exemption (PTE) in order to help clients and receive a commission for doing so and navigate a maze of compliance and liability risks in the process.

Get up to speed on the new rule, as well as the amended PTEs 2020-02 and 84-24 relevant for future sales. NAFA’s newest guide will help you determine how to navigate this rule successfully, acting in accordance with care and loyalty obligations while incorporating the policies, procedures, disclosures and recordkeeping required.

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