ESI Operations Field Notice 2025-08
Qualified Plan Rollover Education Form Update
To streamline your experience, we’ve combined the Defined Contribution and Defined Benefit Education Forms into a single form. The new Qualified Plan Rollover Education Form is available in here, as well as in Docupace and Merrill.
Overview
Throughout the first quarter, one of the most common Not-In-Good-Order (NIGO) reasons was related to “Incorrect or Missing Rollover Disclosure”. At ESI, we’re committed to refining our forms and procedures to support your ability to submit business both compliantly and efficiently.
To support compliance with aspects of the DOL Fiduciary Rule, ESI previously introduced separate Rollover Education and Recommendation Forms for Defined Contribution (DC) and Defined Benefit (DB) Plans. To simplify the process of selecting the appropriate form, we have now combined the Education Forms for DC and DB plans into a single document.
Effective April 15, 2025, please use the new Qualified Plan Rollover Education Form when educating clients about Rollover transactions—regardless of plan type.
Please note: There are still two distinct forms required if you are making a recommendation—the Defined Contribution Rollover Recommendation Form and the Defined Benefit Rollover Recommendation Form.
Education or Recommendation: Understanding the Difference
When considering the potential need for an investor to roll assets from one retirement plan to another, you may provide general information to your client without making a rollover recommendation. For example, education can include any of the following:
- A discussion of the general characteristics of employer-sponsored plans and IRAs, which could include:
- Expenses associated with each
- Available investment options associated with each
- Tax implications of each
- A discussion of the rollover options available under the existing plan. For example:
- Pros and cons of leaving the assets in the current plan
- General discussion of available product types
- A discussion about historic differences in returns between asset categories
- The effects of inflation over time
- Estimates of income needs at retirement, and
- General investment concepts, including dollar cost averaging, modern portfolio theory, and asset allocation.
To stay within the realm of education, the information you provide to the retirement investor may not include a “call to action”. A “call to action” would be an explicit or implicit recommendation that the investor take some action. For example:
- “I recommend you roll this account into an IRA” – clearly a recommendation.
- “If it was my decision, I’d move these assets from the employer” – this is driving the investor to take action and, therefore, a recommendation.
- “I think you should…” – also a call to action.
Generally, referring to a specific product would ordinarily be done if or when a recommendation is made. Therefore, educating an investor on expenses should not include a specific product as an illustration. For example:
“Take XYZ fund, for example. Its expense ratio is…and compare that to your existing plan….”.
Rather, a best practice for providing education could be to avoid naming a particular company or product in the discussion, even if presented for comparison purposes. Keeping the discussion at the product-type level (for example, comparing the structure of mutual funds vs annuities, generally) precludes possibly leading the investor toward a particular product or vendor, and keeps the conversation informational.
When comparing the expenses of available product types, explaining the differences in general terms remains educational and provides the investor a general sense of the differences between products:
“Expense ratios for mutual funds are typically around X%, versus those of variable annuities, which are generally around Y%…”
DOL Fiduciary Rule Status
ESI continues to closely monitor developments related to the DOL Fiduciary Rule. As of April 1, 2025, the rule remains stayed due to ongoing legal challenges.
In July 2024, two federal district courts in Texas issued stays on the rule’s implementation, citing concerns over its validity. The Department of Labor appealed these rulings to the Fifth Circuit Court of Appeals in September 2024. In February 2025, the Fifth Circuit granted a 60-day abeyance, allowing time for newly appointed DOL leadership to review the cases and determine how they wish to proceed.
Further, in March 2025, Representative Tim Walberg—Chairman of the House Committee on Education and the Workforce—sent a formal letter to Labor Secretary Lori Chavez-DeRemer urging the Department to withdraw or rescind the rule.
As a result of these ongoing legal and legislative developments, the implementation of the DOL Fiduciary Rule remains on hold at this time.
Questions
With questions on this policy enhancement, please contact the ESI Brokerage Suitability or ESI Suitability teams via the phone tree at 1-800-344-7437.
TC7865307(0425)1
