Providers Expect Fiduciary Rule to Deter Rollovers

Nearly two-thirds, 64%, of the nation’s top retirement plan recordkeepers and providers believe that the new Department of Labor (DOL) fiduciary rule will deter rollovers from retirement plans into individual retirement accounts (IRAs), thus helping them to retain assets, the LIMRA Secure Retirement Institute found in a survey.

Just more than one-quarter, 28%, think the rule will help them increase asset retention, although 36% think it will have no impact. Another 36% think the rule will have an adverse impact on their asset retention rate. Seventy-five percent say they will change how their call centers respond to retirement plan distribution options.

“The rollover market is expected to exceed $400 billion in 2016,” notes Matthew Drinkwater, assistant vice president at the LIMRA Secure Retirement Institute. “Because asset retention is a top priority for defined contribution (DC) plan providers and recordkeepers, the Institute has been tracking asset retention practices for years. 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.”