Still Awaiting Additional Guidance from DOL on PTE 2020-02

When the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) announced on February 12, 2021 that it would allow the Trump-era fiduciary “3.0” rule – a new prohibited transaction class exemption called Improving Investment Advice for Workers & Retirees (PTE 2020-02) – to go into effect as scheduled on February 16, it also promised that the agency would be publishing “related guidance” on the new exemption “in the coming days.” We are still awaiting that additional guidance. In the meanwhile, industry stakeholders (NAFA, included) have been working to better understand the implications and compliance ramifications of the new rule. NAFA has created a small working group comprised of members from both the Education Committee and the Government and Legislative Affairs Committee to develop educational materials and best practices guidance to help producers and other annuity professionals better understand what it means to be an investment advice fiduciary under the Department’s new interpretation of the 1975 five-part test and to assist with compliance under the new exemption or under the already-existing PTE 84-24.

Did you miss the March 11 NAFA webinar, The Future of Business under the New Administration and DOL’s Fiduciary Rule, presented by Brad Campbell of Faegre Drinker Biddle & Reath and Kevin Mechtley of North American?


DOL update questions? Please contact Pam Heinrich, General Legal Counsel & Director of Government Affairs at NAFA.

NAFA Eagerly Awaits Retirement 2.0 Package and the Protecting the Right to Organize Act Passes the House

The first significant piece of legislation passed by the 117th Congress was recently signed into law by President Biden. The measure, H.R. 1319, the American Rescue Plan Act, provides $1.9 trillion in aid to individuals, families, businesses and states trying to recover from the adverse impacts of COVID-19.

Congress will now turn its attention to other policy issues, including immigration reform, gun control, tax reform, infrastructure spending, and retirement savings changes. NAFA will be closely monitoring tax reform and infrastructure spending as we will likely see many so-called “pay-fors,” or revenue raisers, included in the infrastructure package, and we might see a separate tax reform bill. Regardless of the vehicle, we anticipate tax discussions to heat up quickly, and NAFA wants to ensure there are no adverse impacts to annuities. Of note, the American Rescue Plan Act originally contained a cost-of-living adjustment freeze for overall contributions to defined contribution plans and capped the maximum annual benefit for defined benefit plans beginning in 2031, but the language was removed in the Senate.


Federal update questions? Please contact Cliff Andrews, Managing Principal at CapCity Advocates and Federal Legislative Strategist & Advocate at NAFA.

More States Move to Adopt the New Best Interest Standard for Annuity Sales; NAIC Continues to Work on MDL 275 FAQs

For those of you keeping score at home, there are currently seven states that have adopted the best interest standard of conduct for annuity transactions and the attendant obligations and requirements as articulated under NAIC Model Regulation #275. Two of those states – Iowa and Arizona – made the new requirements effective as of January 1, 2021, and Rhode Island will become the third state to come online as of April 1.  Regulations in the four additional “adopted” states become effective later this summer: the end of June for Michigan and Arkansas and early August for Ohio and Delaware. An additional nine states have formally introduced the updated regulation: Alabama, Idaho, Kentucky, Maine, Montana, Nebraska, North Dakota, Texas, and Virginia; legislation in Idaho and Nebraska need only the Governor’s signatures in those respective states to cross the finish line. NAFA maintains a current tracking document, listing the status of adoption by each state and includes topline information and links to the individual regulations, as well as comment letters submitted by NAFA. This tracking document is also available on the NAFA website.


State update questions? Please contact Pam Heinrich, General Legal Counsel & Director of Government Affairs at NAFA.

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