The Labor Department has revealed its long-awaited fiduciary rule, along with some novel implications for record-keepers, rollover and Pooled Employer Plans advice. Titled “Improving Investment Advice for Workers & Retirees“, the proposal offers a new prohibited transaction class exemption widely available for investment advice plan fiduciaries.
In an effort to show more of a principles-based approach, the proposal classifies retirement investors as plan participants and beneficiaries, IRA owners, and plan and IRA fiduciaries. The DOL states that under the new exemption, financial institutions and investment experts are able to receive a plethora of payments that would otherwise violate the prohibited transaction rules, like commissions, 12b-1 fees, trailing commissions, mark-ups, mark-downs, sales loads, and revenue sharing payments from third parties or investment providers.
Fiduciary Liability Insurance
As the Department of Labor continues to adjust its fiduciary rules and publish new exemptions, plan sponsors must keep in step with these novel proposals and continue to stay compliant with the law. This means purchasing an ERISA fidelity bond, a requirement by the DOL to safeguard an employee benefit plan against losses from fraud or dishonesty. However, though the bond protects plan participants, it leaves the fiduciary unprotected! That’s why you need Fiduciary Liability Insurance, a policy that safeguards fiduciaries when presented with actual or alleged claims of fiduciary breaches. In our ERISA bond packages, we offer ERISA bond protection, Fiduciary Liability Insurance, and Cyber Liability Insurance–to provide you the best coverage possible. Click here to get protected now.