On October 25, 2021, the DOL released Field Assistance Bulletin (FAB) No. 2021-02, announcing a temporary enforcement policy related to the prohibited transaction exemption (PTE) 2020-02. The DOL adopted PTE 2020-02 – Improving Investment Advice for Workers & Retirees – on December 18, 2020. The PTE accompanied the amended fiduciary conflict of interest rule that was finalized in June 2020.
PTE 2020-02 became effective on February 16, 2021, but the DOL provided temporary enforcement relief through December 20, 2021. Specifically, the DOL stated that it would not pursue prohibited transaction claims against investment advice fiduciaries who worked diligently and in good faith to comply with impartial conduct standards. Impartial conduct standards require financial institutions and investment professionals to:
FAB No. 2021-02 extends the DOL’s non-enforcement policy through January 31, 2022. The DOL acknowledged that the earlier December 20, 2021 expiration date posed practical difficulties on financial institutions that were in the process of complying with PTE 2020-02.
The DOL also announced that they will not enforce the specific documentation and disclosure requirements under PTE 2020-02 through June 30, 2022.
Although this FAB extends the non-enforcement policy, financial institutions and investment advisors should continue their good faith compliance with PTE 2020-02.
Field Assistance Bulleting No. 2021-02 »
PPI Benefit Solutions does not provide legal or tax advice. Compliance, regulatory and related content is for general informational purposes and is not guaranteed to be accurate or complete. You should consult an attorney or tax professional regarding the application or potential implications of laws, regulations or policies to your specific circumstances.
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