The DOL Wants Ethically and Competently ERISA IRA Rollovers

Abstract

The Department of Labor (DOL) has issued guidance, warning advisers still serving a retirement plan in a fiduciary capacity that soliciting IRA rollovers or cross-selling additional products to plan participants is prohibited. But plan participants are not a monolithic group. Their financial literacy as to retirement savings and general financial management concepts ranges from the illiterate to the sophisticated. (Discussed later in this article.) The poor decision-making as to retirement planning at a national level is at least partially a product of Department of Labor administrative policy. While providing educational investment materials to workers as to their 401(k)s is laudable in the abstract, it takes a somewhat pernicious form when these generalist materials are deemed sufficient in and of themselves to create investment retirement portfolios and strategies. The Department of Labor is, or should be, fully aware that the average American worker does not have the requisite investment acumen to year-in and year-out steer their 401(k) retirement strategies safely into retirement. Too much is at stake to sugarcoat this. This DOL behavior is negligent at best, and patently unethical otherwise.