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DOL releases 2nd guidance on fiduciary rule

The Department of Labor issued guidance on how its fiduciary rule will apply to investment advice provided to participants in 401(k) plans and people who have IRAs, and other retirement savings options.

The guidance in the form of frequently asked questions, posted Jan. 13 on the Labor Department’s website, addresses technical questions raised by plan service providers concerned about drawing the line between fiduciary and non-fiduciary communications, among other issues.

The FAQ addresses general communications with plan participants, investment education and exemptions for independent fiduciaries. Other areas in the FAQ cover mandatory distributions, revenue sharing when plan fees are offset, and marketing platforms.

“By and large the most recent set of FAQs simply confirmed many of the assumptions plan sponsors had made on investment education,” said Will Hansen, senior vice president of retirement policy for the ERISA Industry Committee. The DOL issued similar guidance Oct. 27 regarding new and existing best-interest exemptions.

“Plan sponsors need to start focusing on what they are being asked to approve” by service providers, said David N. Levine principal at Groom Law Group and counsel to the Plan Sponsor Council of America.

The fiduciary rule, scheduled to take effect April 10, “offers consumers a new level of confidence when working with investment advisers, and levels the playing field for the many advisers who have been giving best interest advice all along,” Phyllis C. Borzi, assistant secretary of labor for the Employee Benefits Security Administration, said in a news release announcing the guidance.

The FAQs are available on the EBSA’s website.