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WINDSOR, Conn., July 25, 2016—A new LIMRA Secure Retirement Institute study shows that 64 percent of the top retirement plan record-keepers and providers believe the Department of Labor (DOL) fiduciary rule will have a positive or neutral effect on their overall asset retention rate over the next two years.

“The rollover market is expected to exceed $400 billion in 2016.  Because asset retention is a top priority for defined contribution (DC) plan providers and record keepers, the Institute has been tracking asset retention practices for years,” commented Matthew Drinkwater, Ph.D., assistant vice president, LIMRA Secure Retirement Institute.  “The DOL fiduciary rule impacts all qualified assets and will likely have a major impact on the rollover market, with some DC plan providers benefitting from increased in-plan retention due to a slowdown in IRA rollover activity.”

The study found that 28 percent of companies felt the rule would help them increase asset retention while 36 percent felt it would have no impact on their current asset retention rate.  Another 36 percent expect the rule to result in a minor decline in their asset retention rate.

Unsure of specifics, 75 percent of plan providers surveyed say they will change how their call centers respond to calls related to retirement plan distribution options.  Many say they also will change procedures for calls not related to distribution options.   

The new DOL fiduciary rule goes into effect in April 2017 and expands the fiduciary standard to anyone providing advice on defined contribution plans or individual retirement accounts.  When the final rule was published, there were questions on what actions call center representative would be considered participant education and what would be considered ‘advice’.  The later would trigger a fiduciary standard to apply.

“Companies recognize that the DOL fiduciary rule is very complicated and adherence will require extensive changes to current business practices.  Nearly three quarters of plan providers anticipate their call center staff needing training to be able to distinguish education from advice,” said Drinkwater.

Earlier this month, LOMA Secure Retirement Institute launched DOL Fiduciary Basics for Employees, a short online course that offers an unbiased, simple explanation of what the rule means to industry organizations and their employees so they can understand the operational changes their company is making to comply with the new rule.

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Media Contacts  

Catherine Theroux, +1-860-285-7787, ctheroux@limra.com 
Mark Morris, +1-860-285-7875, mmorris@limra.com 

About LIMRA Secure Retirement Institute    

LIMRA Secure Retirement Institute provides comprehensive, unbiased research and education about all aspects within the retirement industry to improve retirement readiness and promote retirement security. For more information, please visit www.secureretirementinstitute.com