NEW RULES FOR IRA ADVISORS:

Taxpayers will get new protections for the dollars that they moved out of their 401(k)s into individual retirement accounts, under Labor Department regulations recently released. Savers move close to $1 trillion each year out of their 401(k) employer- sponsored plans into IRAs. The number has grown as more people retire or change jobs.

While 401(k) workplace retirement plans have strict rules requiring any financial advice to be in the best interest of individual savers under the 1974 ERISA rules, those rules have not historically applied once nest eggs were rolled over into individual retirement accounts. The new regulation would extend ERISA’s fiduciary requirements to all advisers, brokers and insurance agents who provide advice on IRAs, including rollovers. The change is scheduled to go into effect on September 23, 2024.

The deadline to impose the changes might not give the industry enough time to comply, some in the financialservices industry said. “It will require extensive work to get into compliance, including technology system updates, record-keeping, training and disclosure practices, and other policies and procedures,” said Jason Berkowitz, chief legal and regulatory affairs officer at the Insured Retirement Institute, an association for the annuities industry that has been critical of the proposal. The Labor Department responds that it took into account the nearly 20,000 comments it received on the proposal from industry groups and individuals.