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DOL Enforcement Deadlines for PTE 2020-02

An advisor asked: “I’m confused by the compliance deadlines for various provisions of Prohibited Transaction Exemption (PTE) 2020-02 related to providing investment advice to retirement investors.  Can you summarize the enforcement deadlines, please?”

Highlights of Discussion

Absolutely; financial professionals and institutions that seek to comply with PTE 2020-02 must satisfy the following six steps by the dates indicated.

PTE 2020-02 Requirements DOL Enforcement Begins
1. Provide advice in accordance with the three “Impartial Conduct Standards,” which mandate that advice be given

·         In the best interest of the retirement investor,

·         At a reasonable price,

·         Without any misleading statements.


After January 31, 2022


Originally effective February 16, 2021, the DOL implemented a “nonenforcement policy” under DOL FAB 2018-02 Field Assistance Bulletin (FAB) 2018-02 until December 20, 2021, for those who diligently and in good faith complied with the Impartial Conduct Standards. FAB 2021-02  further extended the nonenforcement policy through January 31, 2022.


2. Acknowledge in writing their fiduciary status under ERISA and the Internal Revenue Code;

3. Describe in writing the services to be provided and any material conflicts of interest that may exist;

4. Adopt policies and procedures prudently designed to ensure compliance with the Impartial Conduct Standards and that mitigate conflicts of interest;

5.     Conduct an annual retrospective review of their compliance with the requirements and produce a written report that is certified by one of the financial institution’s senior executive officers;

After January 31, 2022


Pursuant to FAB 2021-02, the DOL will not pursue cases against advisors and institutions utilizing PTE 2020-02, provided they make a good faith effort to follow the three Impartial Conduct Standards (see #1 above)

6. FOR ROLLOVERS:  If the advice involves a rollover recommendation, then


• Document the reasons that a rollover recommendation is in the best interest of the retirement investor; and


• Disclose the justification for the rollover in writing to the retirement investor.

After June 30, 2022


Pursuant to FAB 2021-02, the DOL will not enforce the rollover documentation and disclosure requirements of PTE through June 30, 2022.


Financial professionals and organizations that seek relief under PTE 2020-02 should take note of the different enforcement deadlines that apply as a result of FAB 2021-02.

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