Importantly, the updated rulemaking will apply a best-interest standard to account recommendations, including rollovers from retirement plans into individual retirement accounts (IRAs).
The concept is being reintroduced through the American Savings Act
A report to the Department of Labor recommends strategies to enhance portability, reduce plan leakage and protect transfers from employer defined contribution accounts to individual retirement accounts.
The guide includes information on rollovers, loans, hardship withdrawals and much more.
Among other things, the bill allows for hardship withdrawals from more contribution types.
Results from the firm’s product use by one plan sponsor found that upon consolidation, workers' median plan account balance increased by 46% and the combined future value of their preserved savings was more than $3 million at normal retirement age.