On February 12, 2021, the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) confirmed that the prohibited transaction class exemption (PTCE), an exemption for investment advice fiduciaries entitled “Improving Investment Advice for Workers & Retirees,” will go into effect as scheduled on February 16, 2021. As this paper is written, there will be more to come on the subject. The EBSA will be coming out with related guidance for all parties involved (retirement investors, employer-sponsored retirement plans, and advisors to them). In addition to the protections for employer-sponsored plans, the exemption also includes protections for rollovers and transfers to individual retirement accounts (IRAs). The goal of this article is to review the exemption and provide practical practice management concepts for advisors.
Author: Ernest Guerriero, CLU, ChFC, CEBS, CPCU, CPC, CMS, AIF, RICP, CPFA, is the director of Qualified Plans, Business Markets for Consolidated Planning, Inc. He is the subject matter expert to assist companies and individuals with design and implementation of individual and employer sponsored retirement plans. Ernie is a moderator for The American College on retirement and estate planning topics. He has held various positions with major life insurance companies developing and assisting advisors with accumulation, preservation, and distribution planning. Ernie is also the national secretary of the Society of Financial Service Professionals.
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