PTE 2020-02

Prohibited Transaction Exemption 2020-02 is a Department of Labor exemption tied to fiduciary advice on retirement assets covered by ERISA and the Internal Revenue Code. Absent an exemption, an advisor receiving compensation on such advice could be engaging in a prohibited transaction; PTE 2020-02 provides a path to receive that compensation if its conditions are met.

Its conditions include meeting Impartial Conduct Standards, providing certain disclosures, adopting policies and procedures to manage conflicts, and — importantly for transitions — documenting the specific reasons a rollover recommendation is in the client’s best interest.

This entry is a plain-language summary, not legal, tax, or compliance advice. The DOL’s exemption text and a firm’s own compliance program govern how PTE 2020-02 applies in practice.