ERISA
It’s boring!
It’s complicated!
It’s a big law!
But it is the standard you are held to!
UNPARALLELED OPERATIONAL EFFICIENCIES
&
COMPLIANCE PROTECTION
About Rollover Comparison
Rollover Comparison ProTM
Built on a Foundation of Unshakable Documentation, Oversight, and Transparency
Rollover Comparison ProTM is meticulously designed to make rollover advice compliance simple and more manageable.
Rollover Comparison Pro’s processes and procedures are proactive rather than reactive, helping firms stay ahead of potential issues by giving them real-time visibility into the rollover recommendation process—reducing the need to self-correct or the risk of violations and the costs that come with them.
Whether conducting an annual retrospective review or responding to a request from the DOL or SEC, Rollover Comparison ProTM streamlines these processes, regardless of their complexity or the firm’s size. This efficiency leads to significant time and cost savings.
Ultimately, Rollover Comparison ProTM offers a comprehensive solution that reduces human error, simplifies regulatory compliance, and enables firms to manage their obligations with confidence and precision.
Solutions
CRPA – Compliance & Regulatory Program Architects
Rollover Comparison ProTM
Discover the Power of Rollover Comparison Pro — The Ultimate Compliance Ally
Rollover Comparison Pro isn’t just another compliance tool — it’s a game-changer. Whether your an RIA or B/D you can be assured with confidence you’ll be audit-ready. It’s a transformative solution for firms seeking to streamline operations, reduce risk, and guarantee the timely delivery of all required disclosures at the point of making an investment recommendation to the investor.
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Rollover Recommendation Reasoning Manager
This purpose-built tool helps advisors generate personalized, well-documented rollover disclosures that meet regulatory expectations—leveraging reasoning statements developed by a leading ERISA attorney.
Easily customize the statement library to reflect your firm’s value proposition. These statements provide specific, documented reasons that demonstrate how the rollover serves the investor’s best interests while meeting PTE compliance requirements for detailed justification.
🛡 Proactive Compliance Monitoring
Stay ahead of risk. Rollover Comparison Pro empowers compliance teams to detect and address potential issues before they escalate, turning compliance into a proactive strength rather than a reactive obligation.
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Forget scrambling during audits. With automated documentation and secure storage, every required record is generated and maintained with precision — making audits, reviews, and inspections fast and stress-free.
⚠️ Built-In Risk Mitigation
Reduce the risk of costly violations. By automating critical compliance functions and flagging issues early, Rollover Comparison Pro protects your firm from regulatory pitfalls and financial penalties.
📊 Frictionless Reporting & Retrospective Reviews
When it’s time to compile the annual retrospective review or respond to a DOL inquiry, Rollover Comparison Pro does the heavy lifting. No matter what your firm’s size or complexity, it delivers fast, accurate reporting — exactly when you need it and for whatever date range you need it.
These are the fundamental questions you need to understand.
Q 10 What is required to comply with PTE 2020 – 02?
PTE 2020-02 conditions prohibited transaction relief on financial institutions (SEC- and state-registered investment advisers, broker-dealers, banks, and insurance companies) and their investment professionals (employees, agents, and representatives) providing advice in accordance with the Impartial Conduct Standards. Financial institutions must also acknowledge in writing their investment professionals’ fiduciary status under Title I of ERISA and the Internal Revenue Code, as applicable, when providing investment advice to the retirement investor, and they must describe in writing the services to be provided and the financial institutions’ and investment professionals’ material conflicts of interest. Financial institutions must document the reasons that a rollover recommendation is in the best interest of the retirement investor and provide that documentation to the retirement investor. Financial institutions must adopt policies and procedures prudently designed to ensure compliance with the Impartial Conduct Standards and that mitigate conflicts of interest, and must conduct an annual retrospective review of compliance.
To ensure that financial institutions provide reasonable oversight of investment professionals and adopt a culture of compliance, financial institutions and investment professionals will be ineligible to rely on the exemption if, within the previous 10 years, they were convicted of certain crimes arising out of their provision of investment advice to retirement investors. They will also be ineligible if they engaged in systematic or intentional violation of the exemption’s conditions or provided materially misleading information to the Department in relation to their conduct under the exemption.
Q 15 What factors should financial institutions and investment professionals consider and document in their disclosure of the reasons that a rollover recommendation is in a retirement investors best interest?
Financial institutions and investment professionals must consider and document their prudent analysis of why a rollover recommendation is in a retirement investor’s best interest. To satisfy the documentation requirement for rollovers from an employee benefit plan to an IRA, investment professionals and financial institutions should make diligent and prudent efforts to obtain information about the existing employee benefit plan and the participant’s interests in it. For recommendations to roll over assets from an employee benefit plan to an IRA, the relevant factors include but are not limited to:
- the alternatives to a rollover, including leaving the money in the investor’s employer’s plan, if permitted;
- the fees and expenses associated with both the plan and the IRA;
- whether the employer pays for some or all of the plan’s administrative expenses; and
- the different levels of services and investments available under the plan and the IRA.
To satisfy the documentation requirement for rollovers from an employee benefit plan to an IRA, investment professionals and financial institutions should make diligent and prudent efforts to obtain information about the existing employee benefit plan and the participant’s interests in it. In general, such information should be readily available as a result of Department regulations mandating disclosure of plan-related information to the plan’s participants (see 29 CFR 2550.404a-5). If the retirement investor won’t provide the information, even after a full explanation of its significance, and the information is not otherwise readily available, the financial institution and investment professional should make a reasonable estimation of expenses, asset values, risk, and returns based on publicly available information. The financial institution and investment professional should document and explain the assumptions used and their limitations.
Q 19 What is the exemption’s annual retrospective review requirement and what is its purpose?
Financial institutions must conduct an annual retrospective review that is reasonably designed to assist them in detecting and preventing violations of, and achieving compliance with, the Impartial Conduct Standards and their policies and procedures. The methodology and results of the retrospective review must be reduced to a written report that is provided to one of the financial institution’s senior executive officers, who must then make certain certifications related to their review of the report. The financial institution must retain the report, certification, and supporting data for six years and provide these documents to the Department within 10 business days of a request.
The Department expects financial institutions to use the results of the review to find more effective ways to help ensure that investment professionals are providing investment advice in accordance with the Impartial Conduct Standards and to correct any deficiencies in existing policies and procedures. Senior executive officers should carefully review the report before making the required certifications, so that they can make the certifications with confidence. Making the certifications without carefully reviewing the report would constitute a violation of the exemption. This ensures that the financial institution, through an appropriate senior executive officer, is fully accountable for the retrospective review. The requirement that financial institutions make their report of their retrospective review available to the Department within 10 business days upon request ensures that the Department retains an appropriate level of oversight over exemption compliance.
Q20. Is there any way for financial institutions to correct violations of the exemption?
Yes, PTE 2020-02 contains a correction procedure for financial institutions to correct certain violations. Financial institutions can correct violations of the exemption within 90 days after the financial institution learns, or reasonably should have learned, of the violation. If the violation did not result in investment losses to the retirement investor or the financial institution made the retirement investor whole for any resulting losses, the financial institution can correct the violation and notify the Department within 30 days of correction. The financial institution must notify the persons responsible for conducting the retrospective review described in Q19 of the violation and correction, and the violation and correction must be specifically set forth in the written report of the retrospective review.
Q 21 How will the Department enforce compliance with the exemption?
The Department has investigative and interpretive authority with respect to exemption compliance. For plans covered by ERISA Title I, the Department will investigate for compliance with the exemption and enforce the Title I protections. In addition, participants, beneficiaries, and fiduciaries of these plans have a statutory cause of action under Section 502 of ERISA for fiduciary breaches and prohibited transactions. For IRAs and other non-Title I plans, the Department has interpretive authority to determine whether the exemption conditions have been satisfied and transmits information to the IRS for enforcement of the excise tax. In marked contrast to the 2016 rulemaking, the new exemption does not impose contract or warranty requirements on the financial institutions or investment professionals responsible for compliance. The exemption also does not expand retirement investors’ ability to enforce their rights in court or create any new legal claims beyond those in Title I of ERISA and the Code.
The exemption also includes several provisions intended to support and incentivize compliance. In addition to the annual retrospective review and self-correction discussed in previous FAQs, the exemption also encourages compliance by setting forth circumstances under which financial institutions and investment professionals can become ineligible to rely on the exemption for a period of 10 years.
Parties can become ineligible following conviction for specified crimes, or if they have engaged in systematic or intentional violation of the exemption’s conditions or provided materially misleading information to the Department in relation to their conduct under the exemption.
ARE YOU READY FOR
PTE 2020-02?
