This April, the Department of Labor (DOL) published a final rule that expands on who is considered a “fiduciary” when providing financial advice to retirement plans and their participants. This expanded definition will take effect on April 10, 2017. Other provisions related to prohibited transaction exemptions for advisors will become effective on Jan. 1, 2018.
The final rule also covers health savings accounts (HSAs). The DOL determined that HSA owners are entitled to receive the same protections from conflicted investment advice as individual retirement account (IRA) owners. Individuals who provide advice on HSAs may be considered fiduciaries if their communications rise to the level of investment recommendations covered by the final rule.
The final rule clarifies that many common plan sponsor activities, such as providing investment educational information and communication with employees about distribution options, are not fiduciary investment advice.