IRI STATEMENT ON THE U.S. DEPARTMENT OF LABOR’S PROHIBITED TRANSACTION EXEMPTION FOR INVESTMENT ADVICE PROFESSIONALS

February 12, 2021

WASHINGTON, D.C. – The U.S. Department of Labor announced today that a new prohibited transaction exemption for providers of investment advice will take effect as scheduled on Tuesday, February 16, 2021. The Insured Retirement Institute (IRI) issued the following statement from Chief Legal and Regulatory Affairs Officer Jason Berkowitz in response to the DOL’s decision.

“IRI supports the Labor Department’s decision to allow the exemption to take effect without delay. This will permit our member companies to continue to provide clients with valuable retirement products and services under robust consumer protections that ensure financial advice professionals act in their clients’ best interest. Our members are prepared to undertake the necessary hard work to implement the new exemption, which will require updating policies and procedures, modifying systems, training, and more.

“However, we continue to disagree with the expansive interpretation of the five-part test contained in the rule’s preamble. This interpretation is inconsistent with the 2018 decision by the U.S. 5th Court of Appeals in U.S. Chamber of Commerce v. U.S. Department of Labor. Further, the rule does not provide a clear and workable path to exemptive relief for independent insurance agents.

“IRI will continue to work with the Department to clarify this regulation to ensure that retirement savers have access to their choice of financial advice, products, and services that will help them achieve a financially secure and dignified retirement.”

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Contact: Dan Zielinski