Biden Cracks Down on 'Junk Fees’ in 401(k) Plans with Proposed DOL Fiduciary Rule

Biden Cracks Down on 'Junk Fees’ in 401(k) Plans with Proposed DOL Fiduciary Rule

October 31, 2023, BenefitsPRO

Jason Levy’s commentary was included in a BenefitsPRO article covering new rules proposed by the Biden administration directing retirement plan advisors to crack down on junk fees. The new rule by the U.S. Department of Labor (DOL) would require providers to sell commodities and insurance products only when it is in the customer’s best interest.

Jason said “it may be a long time before there is clarity on the likely key focus on the new fiduciary rule — whether rollover recommendations are subject to the fiduciary standard. This question has been the subject of active litigation, and it is likely that this aspect of the forthcoming rule will be challenged in court.”

Advisors will gain a better understanding of what the rule means to the industry as more details emerge. Jason added that “while rollovers may grab the headlines, there likely will be other aspects of the new fiduciary rule that will impact financial advisors and financial institutions.” He went on to explain that “the details here will matter. For example, an important detail is whether the rule will acknowledge differences between communications to retail investors and large, sophisticated plans.”