In April, the Department of Labor (DOL) published a final rule that expands on who is considered a “fiduciary” when providing financial advice to retirement plans and their participants. This expanded definition will take effect on April 10, 2017. Other provisions related to prohibited transaction exemptions for advisors will become effective on January 1, 2018.
The final rule also covers health savings accounts (HSAs). The DOL determined that HSA owners are entitled to receive the same protections from conflicted investment advice as individual retirement account (IRA) owners. Individuals who provide advice on HSAs may be considered fiduciaries if their communications rise to the level of investment recommendations covered by the final rule.
The final rule clarifies that many common plan sponsor activities, such as providing investment educational information and communication with employees about distribution options, are not fiduciary investment advice. Additionally, the final rule explains that a plan sponsor’s employee does not become a fiduciary by providing advice to a plan fiduciary or to another employee, provided the person receives no fee or other compensation, direct or indirect, in connection with the advice beyond the employee’s normal compensation for work performed for the employer.
The DOL’s web page on the final rule includes links to the final rule and related prohibited transaction exemptions. It also includes links to frequently asked questions (FAQs) on the final rule and fact sheets that describe the final rule’s requirements.
Our employee benefits team can help your organization understand rules and other compliance-related matters. To learn more, visit AssuredPartners NL Employee Benefits.
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