July 16, 2015
The Department of Labor (DOL) has issued guidance clarifying the fiduciary rules governing purchases of annuities in defined contribution (DC) plans. In Field Assistance Bulletin (FAB) 2015-02, the DOL addresses questions that have risen about how to reconcile the “time of selection” standard in the DOL’s safe harbor rule for annuity purchases by DC plans with the duty to monitor and review certain fiduciary decisions under the Employee Retirement Income Security Act*. The DOL believes that confusion or lack of clarity has led some DC plans to avoid offering annuities as a distribution option.
Under the guidance, the DOL noted:
If you have any questions about the guidance, please contact your Sibson consultant or send us a note.
* The Affordable Care Act is the shorthand name for the Patient Protection and Affordable Care Act (PPACA), Public Law No. 111-48, as modified by the subsequently enacted Health Care and Education Reconciliation Act (HCERA), Public Law No. 111-152.
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