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DOL rule may underestimate 401(k) inflexibility for decumulation strategies

The Department of Labors fiduciary rule may restrict assets in 401(k) plans from flowing to IRA accounts, says Cerulli Associates.

By Nick Thornton | Updated on June 21, 2016
The Department of Labor’s fiduciary rule may restrict assets in 401(k) plans from flowing to IRA accounts. (Image: Getty)

By raising the standard on advisors recommending IRA rollovers to a fiduciary level of care, the Department of Labor’s fiduciary rule may restrict assets in 401(k) plans from flowing to IRA accounts, according to the latest edition of the Cerulli Edge, published by global analytics firm Cerulli Associates.

While the Boston-based firm “strongly agrees” with the intention to raise financial advisors’ standard of care and protect retirement investors from conflicts of interest, the rule’s implicit belief that employer-sponsored plans are the optimal place for retirement savers may have unintended consequences as investors seek to convert accumulated savings to income in retirement.

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Nick Thornton

Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.

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