As the effective date, June 9, 2017, rapidly approaches below is some information to keep in mind.
As a “fiduciary” to a plan or a participant governed by ERISA’S prudent man rule and duty of loyalty, an advisor must engage in a process that a knowledgeable person would evaluate prior to making a decision.
An example when recommending a distribution:
- Gather information regarding the investment, services, etc. within the plan (need to know what they already have)
- What are the expenses, services, etc available within the new recommended product/plan (need to know what they will have if they move to the recommendation)
- What are the needs/circumstances of the person – which course of action (maintain or move) is more appropriate for the participant relative to their retirement
This information needs to be gathered and evaluated with a duty of loyalty to the participant.