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Guidance on Investment Advice Exemption


The DOL’s Employee Benefits Security Administration (the “EBSA”) recently released additional guidance on PTE 2020-02, Improving Investment Advice for Workers and Retirees, a new prohibited transaction exemption under ERISA that was adopted on December 18, 2020 (the “Exemption”) (see our prior blog posts about the Exemption here and here). The guidance consists of two documents: (i) a publication titled “Choosing the Right Person to Give You Investment Advice: Information for Investors in Retirement Plans and Individual Retirement Accounts” (the “Investor Guidance”), and (ii) a publication titled “New Fiduciary Advice Exemption: PTE 2020-02 Improving Investment Advice for Workers & Retirees Frequently Asked Questions” (the “Advisor Guidance”). The Investor Guidance provides information on the Exemption for investors and includes a list of questions for investors to ask their investment advice providers, as well as a list of investor-focused FAQs. The Advisor Guidance is compliance focused and includes a list of FAQs targeted towards financial institutions and other investment advice providers to help guide such providers in complying with the Exemption. Investment advice providers should review the Advisor Guidance to ensure they satisfy the various requirements under the Exemption.

The EBSA’s news release is available here.

The Investor Guidance is available here.

The Advisor Guidance is available here.

The lawyers of our Employee Benefits and Executive Compensation Practice Group are readily able to assist companies on a nationwide basis with implementing sophisticated benefit plans and providing answers to their most challenging compensation issues. Additionally, our lawyers are well aware of the daily employee benefits challenges facing companies of all sizes and are capable of helping in-house lawyers and human resources personnel with the day-to-day advice and guidance necessary to properly administer employee benefits plans.

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