On February 12, 2021, a press release was issued by the Department of Labor to confirm the new fiduciary investment advice guidelines under Prohibited Transaction Exemption 2020-02 will go into effect on February 16, 2021. The DOL adds that the temporary enforcement policy stated in Field Assistance Bulletin 2018-02 will remain in place until Dec. 20, 2021.
The industry was previously unsure whether the regulation “Improving Investment Advice for Worker & Retirees” would pass as it was drafted under the Trump administration, once the Biden administration took over since a memo had been issued to regulatory agencies suspending new regulations issued during the final days of the Trump administration.
This new law impacts advisors who provide rollover recommendations to their solo 401k and self-directed IRAs as it will be considered fiduciary advice.
“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,” said Ali Khawar, deputy assistant secretary of labor for the Employee Benefits Security Administration.