Pension Protection Act of 2006

The role of Fiduciary Advisor was created as part of the Pension Protection Act of 2006 so that pension plan participants could get specific investment advice from their investment managers. This was due to overwhelming evidence that participant education on its own has failed, and that plan participants want personalized investment advice.

Existing ERISA rules prevented investment managers from providing such advice. The PPA now allows plan managers to offer participants advice under strict conditions.

The PPA also requires annual audits of “eligible investment advice arrangements”: when a fiduciary adviser is paid to provide specific investment advice to participants. The advice is defined as either based on a computer-driven model or is fee neutral. Details of the exact audit criteria are still being defined and tested. Today, there are assessment methodologies that we believe meet the audit criteria as defined in the PPA.

Contact us about a “Fiduciary Advisor” assessment designed to show your compliance with the ERISA and the exceptions under the Pension Protection Act of 2006.