American Retirement Association Files Comments on Fiduciary Proposal
ARLINGTON, VA – The American Retirement Association (ARA) submitted its comment letter to the Department of Labor (DOL) on the fiduciary rule re-proposal.
In the letter, the ARA emphasized the organization’s long support of aligning the interests of retirement plan advisers to individual retirement investors through a best interest standard. However, the letter also put forth a number of modest, but critical improvements to the re-proposed rule. As the letter outlines, these improvements are needed so that the implementation of the best interest standard doesn’t impede advisers and providers from being able to assist plan participants with key concerns, including rollovers or investment education.
Five key principles serve as the foundation for the ARA’s comments:
- Plan advisers should be encouraged to help plan participants with rollovers, not penalized for providing advice to the plan
- Restrictions on investment education shouldn’t make participant education harder to translate into practice, and thus less helpful to participants.
- A best interest standard shouldn’t discourage advisers from wanting to work with small businesses.
- The platform marketing carve-out has to extend from the platform providers to TPAs and others that actually market the platforms or it won’t work.
- There must be a 2-year transition period after publication of the final rule to allow adequate time to transition existing relationships to the new requirements.
The ARA has proposed a separate exemption for advisers that provide “levelized compensation advice”, such that retirement plan advisers will not be at a competitive disadvantage in helping participants make critical rollover decisions vis-à-vis advisers who had no previous relationship with the participant in the plan.
The ARA also argued in its letter that the current investment education parameters be maintained, including the ability to reference specific fund names in any general communication to plan participants without turning such education into fiduciary advice.
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