Monday, May 17, 2021 Employers who sponsor and maintain retirement plans on behalf of their employees and who engage investment advisors to provide investment-related advice to participants may take comfort in knowing there is a new prohibited transaction exemption under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the Internal Revenue Code (the “Exemption”) designed to protect plan participants. Department of Labor (“DOL”) PTE 2020-02, Improving Investment Advice for Workers & Retirees, became effective on February 16, 2021. On April 13, 2021, the DOL issued implementing guidance further explaining the protections afforded under the Exemption and how to realize these protections. The Exemption focuses on investment advisors and is designed to protect the interest of participants more systematically in retirement plans and makers of individual retirement accounts (IRAs) (collectively “Retirement Investors”). It applies when such Retirement Investors engage with investment advisors who are providing fiduciary advice over the management of retirement plan and/or IRA assets for a fee or seek rollover distributions. With these transactions, there is the potential for the investment advisor to steer participants to investments providing the advisor with increased compensation as a result of their investment-related advice, which would implicate the prohibited transaction rules of ERISA and the Internal Revenue Code. The DOL weighed the value of that advice against the risks and concluded that an exemption from the prohibited transaction rules was needed – with guardrails.