Q. On Dec. 18, 2020, the DOL released Prohibited Transaction Exemption (PTE) 2020-02, “Improving Investment Advice for Workers & Retirees.” It reinterpreted and broadened the five-part test under DOL’s 1975 regulation defining who an advice fiduciary is. What are the conditions for this exemption?
A. Conditions for the new class exemption include:
- follow impartial conduct standards;
- acknowledge fiduciary status;
- describe services and disclose material conflicts in advance;
- develop written policies and procedures to comply with these standards and mitigate conflicts;
- conduct annual retrospective compliance review; and
- document rollover advice.
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