Department of Labor Extends Compliance Date for Investment Advice Exemption

The Department of Labor today issued a field assistance bulletin to extend the compliance date for the class exemption on investment advice. The bulletin provides temporary operational relief through Jan. 31, 2022, from the requirements of Prohibited Transaction Exemption 2020-02, “Improving Investment Advice for Workers & Retirees,” that a number of ABA member banks intend to rely on to continue providing investment advice for compensation to retirement plans and to individual retirement accounts.

The bulletin also states the Department of Labor will not enforce through June 30, 2022, the specific documentation and disclosure requirements for rollovers in PTE 2020-02. As a result of the extension, banks can now deliver fiduciary acknowledgments to existing customers with year-end statements and align annual compliance review with year-end cycles.

ABA had previously requested the extension and provided information on compliance challenges that assisted the department’s decision to grant the extension. In its request, ABA noted issues with rollover cost comparisons; procurement process and solutions development; bank personnel training; internal reviews and revisions of policies, procedures, and related matters; and approvals.