A guide to help advisors understand the proposed Department of Labor changes to the fiduciary definition regulations. The DOL’s proposed changes to the fiduciary definition regulations are causing financial advisors to re-examine their business models and to determine whether they may be a fiduciary to the plan and participants under the proposed regulations. These proposed changes will not only impact qualified retirement plans, but non-qualified plans too, such as IRAs. There could be major implications for how advisors will work with IRAs if these changes are implemented. This Practice Guide provides a framework to help advisors understand this issue by addressing the following questions: What are the rules today? What is being proposed? How would some of the proposed changes impact an advisor’s practice? Are there any action steps an advisor can take today in anticipation of the new rules?

1. Updates and best practices for a changing
regulatory environment
IRAs & the ERISA
fiduciary rules

2. 2
IRAS & THE ERISA FIDUCIARY RULES | EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Interplay of ERISA Fiduciary Rules & IRA Rollovers
The Department of Labor’s (DOL’s) proposed changes to the
fiduciary definition regulations have been the subject of heated
debate in our industry over the last few years – causing many
advisors to re-examine their business model and analyze whether
they are a fiduciary to the plan (and participants) today vs. under
the anticipated re-proposed regulations.
The fiduciary conversation has taken an interesting turn in recent months. Much of the discussion
has focused on speculation about the potential impact the anticipated regulations could have on
Individual Retirement Accounts (IRAs). Why has this become such a big concern? A significant amount
of retirement savings dollars are held in IRAs – more than $5.7 trillion dollars as of March 31, 2013 (The
U.S. Retirement Market, First Quarter 2013 (ICI)), representing more than 25 percent of retirement savings
assets. And this number is expected to grow as baby boomers retire. IRAs are an important component
of many advisors’ growth strategy.
The current debate regarding IRAs is focused on how the expanded fiduciary definition will be applied
to IRAs:
• Will advising a participant to make a rollover from an employer plan result in ERISA fiduciary status?
• Will investment advice provided to IRA holders be considered “investment advice for a fee” under the
same definition as employer plans such as 401(k) plans?
• Will the rules apply both to broker-dealers and registered investment advisors (referred to collectively
as “advisors” in this Practice Guide)?
While we don’t know what the re-proposed fiduciary definition regulation will look like, most industry
experts anticipate a broader definition of “fiduciary” that will result in more broker-dealers and
registered investment advisors becoming ERISA fiduciaries. Activities that today are considered
non-fiduciary investment support or education for plan sponsors and participants may be considered
fiduciary activity under the DOL regulations expected to be released later in 2013.
Given public comments by Assistant EBSA Secretary Phyllis Borzi, it is likely that the expanded fiduciary
definition will also have an impact on how advisors work with IRAs. Advisors may be considered an ERISA
fiduciary for investment support activities relating to IRAs and IRA rollovers that today are considered
non-fiduciary activities. Ultimately, this means that unless a prohibited transaction exemption is
available, an advisor’s business model and compensation structures may need to change if they work
with IRAs – or the advisor may be engaged in a prohibited transaction.
Some industry commenters and members of Congress have argued that applying the fiduciary rules
to IRA activity without sufficient prohibited transaction exemptions could have a chilling effect on
individuals’ access to IRA financial advice, particularly with small rollover balances.

3. 3
IRAS & THE ERISA FIDUCIARY RULES | EXECUTIVE SUMMARY
Expanded IRA Debate
The IRA rollover debate is a complex one that cuts across several regulatory agencies – DOL, IRS, SEC,
and FINRA. IRAs have also captured the attention of Congress. The Government Accountability Office
(GAO) increased attention to the IRA rollover issue with its March 2013 report entitled 401(k) Plans:
Labor and IRS Could Improve Rollover Process for Participants. In the report, the GAO criticized service
providers for encouraging IRA rollovers when a rollover may not have been in the best interests of the
participant, in some cases by using misleading or incomplete information.
The GAO report played a big role in expanding the IRA rollover debate to explore whether additional
support is needed to help plan participants make more informed IRA rollover decisions. Suggestions
from the GAO and others include:
• Providing participants who are eligible for a rollover a concise written summary explaining a
participant’s distribution options, including the option to roll assets to a new employer plan, and listing
key factors a participant should consider when comparing possible investments.
• Mandating expanded fee information for IRAs similar to the disclosures now required under the ERISA
404a-5 regulations for participant-directed plans.
Scope of this Practice Guide
The purpose of this Practice Guide is to provide a framework to help advisors understand this fast-
evolving issue by addressing the following questions:
• What are the rules today?
• What is being proposed?
• How would some of the proposed changes impact an advisor’s practice?
• Are there any action steps an advisor can take today in anticipation of the new rules?

4. 4
IRAS & THE ERISA FIDUCIARY RULES
Current Rules – Under the current law
and regulations,
• An advisor who is not otherwise a plan fiduciary
does not become an ERISA fiduciary merely
because they are advising plan participants
regarding rollovers, even if the advisor will
receive compensation if the assets are rolled to
an IRA (DOL Advisory Opinion 2005-23A).
• If an advisor is a fiduciary to the plan, however,
rollover advice potentially gives rise to a
prohibited transaction because the fiduciary is
providing guidance that can potentially increase
their compensation.
Proposed DOL Changes – In 2010, the DOL
proposed changes to the definition of who is
considered a fiduciary under ERISA Section
3(21) as a result of providing investment advice
for a fee.
• The DOL proposed modifying the current five-
part test by eliminating the requirement that
the advice be provided on a “regular basis” and
that the advice be the “primary basis” for the
investment decisions. These two changes would
significantly expand the group of advisors who
would be considered ERISA fiduciaries based on
providing investment advice.
• The DOL also asked for comments as to whether
advising plan participants regarding rollovers
should be subject to a fiduciary standard.
Re-proposed fiduciary definition regulations are
expected later in 2013. While we do not know at
this time what will be included in the re-proposed
regulations, given public comments made by
Assistant Secretary Phyllis Borzi, most industry
commenters believe there will be a broader
definition of advisor activities that will result
in fiduciary status and that the regulations will
clarify how that broader fiduciary standard applies
to IRAs – particularly IRA rollovers. Assistant
Secretary Borzi has also indicated that the re-
proposed regulations will be accompanied by a
robust economic analysis and a list of proposed
exemptions to types of transactions prohibited by
the regulations.
The Changing IRA
Landscape
Let’s begin by sizing up the IRA rollover
opportunity. According to estimates by the ICI, at
the end of first quarter 2013, defined contribution
plans held more than $5.4 trillion, and IRAs held
more than $5.7 trillion of the estimated $20.8
trillion in total retirement assets.
A substantial portion of these IRA assets
originated in an employer retirement plan or other
retirement arrangement that was rolled over to
the IRA. Rollovers from employer plans to IRAs
that occur when people change jobs or retire are
the greatest source of dollars flowing into IRAs.
It is estimated that 10,000 baby boomers (born
between 1946 and 1964) turn 65 each day. With
more than 78 million baby boomers expected
to retire over the next 20 years, most industry
experts anticipate substantial growth in IRAs.
Capturing these rollovers and incorporating them
into a retirement income strategy is an important
practice focus for many advisors.
Regulatory Environment
For Advisors
IRAs Snared in the ERISA Fiduciary
Regulations Debate
IRAs are subject to the same prohibited
transaction rules as employee retirement plans,
although the underlying statutory basis is Internal
Revenue Code Section 4975 rather than ERISA. The
IRS has primary responsibility for ensuring that
IRAs and employer plans follow the requirements
set forth in the Internal Revenue Code.
However, by agreement between the Treasury
Department and the DOL under Section 2 of the
Reorganization Plan of 1978, the interpretation
and rulemaking authority for prohibited
transactions under both ERISA and the Internal
Revenue Code were consolidated and transferred
to the DOL. The IRS retained the responsibility
to enforce the tax laws and impose excise taxes
on prohibited transactions.
IRAs Are a Big Source
of Retirement Savings
...and Getting Bigger
With more than 78
million baby boomers
expected to retire
over the next 20 years,
most industry experts
anticipate substantial
growth in IRAs.

5. 5
IRAS & THE ERISA FIDUCIARY RULES
ENTITY IRA GUIDANCE/COMMENTARY
DOL Re-proposed fiduciary definition regulations (anticipated late 2013)
• Expanded definition of fiduciary
• Will clarify impact of rules on IRAs
Authority over interpretation of prohibited transactions (Reorganization
Action of 1978)
SEC Exploring impact of a harmonized fiduciary standard for investment advisors
and broker-dealers when providing individualized advice to retail investors
FINRA Guidance for marketing and communications regarding fees associated with
retail brokerage accounts and IRAs (Notice 2013-23 (July 2013))
GAO Detailed report and recommendations regarding IRA rollovers (401(k)) Plans:
Labor and IRS Could Improve Rollover Process for Participants (March 2013)
IRS Primary responsibility for IRA guidance and enforcement
Alphabet Soup of Agencies Involved
in IRA Oversight
While the current focus has been primarily on
how IRA activity will be affected by the anticipated
DOL fiduciary regulations, IRAs are subject to
oversight by a number of different organizations.
Following is a quick snapshot of agencies that
have recently provided input that may impact
IRA rollovers.
Congressional Interest in IRA Rollovers
Congress has been engaged in both the fiduciary
definition debate and the IRA rollover debate.
There has been significant criticism of the
original proposed (and then withdrawn) fiduciary
regulations and the inclusion of IRAs under these
regulations. Some of the criticism comes from
the investment world, particularly in regards
to the increased liability for any investment
services provided to IRA holders. Some fear it will
disrupt compensation and business structures
in a market that is supported largely by broker-
dealers and advisors receiving commissions and
12b-1 fees for their IRA services. Members of the
Congressional Black Caucus and the Congressional
Hispanic Caucus, in a June 14, 2013, letter to acting
Department of Labor Secretary Seth Harris, raised
concerns that the DOL’s re-proposal of the ERISA
fiduciary definition regulations “could severely
limit access to low-cost investment advice” and
that a new, more restrictive definition of fiduciary
“would add yet another barrier to accessing
qualified retirement planning services.”
Given the concerns regarding IRA rollovers raised
by the GAO in its IRA rollover report (referenced
earlier), there has been speculation that expanded
IRA fee disclosures may be in our future. The GAO
concluded that, “Participants may have difficulty
finding information on IRA fees, and when they
do find it, they may not understand it.” Although
some financial disclosure information is required
today for IRAs, it is far less extensive than the
detailed information now required under the
ERISA 404a-5 regulations for retirement plan
participants in participant directed individual
account plans. No specific legislation or regulation
had been introduced as of the date this Practice
Guide was published.

6. 6
IRAS & THE ERISA FIDUCIARY RULES
We may also see further discussion regarding
the GAO suggestion to provide retirement plan
participants who become eligible for rollovers
more information on their distribution options,
including
• the option to roll over assets to a new employer
plan, and
• key factors a participant should consider when
comparing possible investments.
Potential Impact on Advisors Who Work
With IRAs
As of the date this Practice Guide was published,
we don’t know precisely what will be included in
the re-proposed ERISA fiduciary rules or whether
additional IRA disclosures will become a reality.
If the proposed changes being discussed by the
DOL and Congress are adopted, however, it could
have a substantial impact on the way advisors
work with IRAs. Possibilities include:
• Advisors may be considered a fiduciary for
investment support activities relating to
qualified plan sponsors and participants that
today are considered non-fiduciary activities.
• Soliciting IRA rollovers may result in fiduciary
status.
• Investment (advice) support to IRAs may be
subject to the ERISA fiduciary standard.
Ultimately, this means an advisor’s business
model and compensation structures may need to
change if they work with IRAs – or they may be
engaged in a prohibited transaction.
In the interim, the current rules remain in effect:
• If an advisor is not an ERISA fiduciary to the
plan or participants under ERISA 3(21) or 3(38),
a recommendation to roll assets to an IRA does
not make the advisor an ERISA fiduciary, even
if the advisor will receive compensation if the
assets are rolled to an IRA. Examples include
advisors who do not have a relationship with the
plan or who provide investment education, and
other non-fiduciary support to the plan.
• If an advisor is a fiduciary to the plan or
participants, their recommendation regarding
rollovers may result in a prohibited transaction.
REGULATORY CHECKPOINTS
1. If you pursue IRA rollovers from
retirement plan participants, do you
provide services to the plan from which the
rollover will be made?
• No – Under current rules, advice regarding
the rollover does not alone result in
ERISA fiduciary status.
• Yes – Evaluate your service model to
determine whether you are an
ERISA fiduciary.
2. Do you limit your support services to
investment education and other non-
fiduciary support?
• Yes – Under current rules, advice regarding
the rollover does not alone result in ERISA
fiduciary status.
• No – If you are an ERISA 3(21) investment
advisor or 3(38) investment manager,
solicitation of rollovers from that plan may
result in a prohibited transaction.
The advisor should consult with a legal advisor
regarding their business model.
Advisor Action Steps
In this section of the Practice Guide, we’ll suggest
three actions that may help advisors evaluate
how the current rules regarding rollover advice
and solicitation may affect their practice and
what advisors can do to stay on top of this rapidly
evolving issue.
Action #1: Evaluate Your Rollover
Business Model
Analyze your current IRA rollover practices
Given the current focus on IRA rollover activity,
it is prudent to analyze your current practices
relative to IRA rollovers from retirement plans.
Consider both whether your business model
raises regulatory concerns under ERISA as well as
how your model affects your growth objectives.
The following questions may be helpful as a
starting point to understand the regulatory
impact of your current business model relative
to IRA rollovers.

7. 7
IRAS & THE ERISA FIDUCIARY RULES
If your answers to the questions raise
concerns that your rollover solicitations
may be prohibited, you should review your
service model with your legal advisor to confirm
whether your services are in fact fiduciary
services and whether any exemptions are
available. Some legal advisors believe there
are alternatives that may enable an advisor
to segment the fiduciary investment support
and non-fiduciary IRA rollover support they
provide to a plan and its participants, subject to
written plan and participant-level agreements.
You should consult with a legal advisor before
pursuing this alternative.
Action #2: Assess the Rollover IRA Opportunity
1. Understand the differences and benefits of
Traditional IRAs and Roth IRAs.
Just as employee contributions to certain
retirement plans may be made as either pre-tax or
Roth contributions, contributions to IRAs can be
made as pre-tax Traditional IRA contributions or
Roth contributions. Nondeductible contributions
may also be made to a Traditional IRA. Both types
of IRAs offer flexible tax-planning opportunities;
you should understand the advantages and
disadvantages of each. The IRS has developed a
Traditional and Roth IRAs Comparison Chart that
you may find helpful.
IRA comparison chart:
http://www.irs.gov/Retirement-Plans/
Traditional-and-Roth-IRAs
2. Invest the time to learn more about the
rollover rules.
The options for moving money between different
types of retirement plans have become more
liberal over the years, allowing more opportunity
for individuals to roll over their retirement
assets. In response to the heavy volume of
rollover activity among retirement savings
arrangements, the IRS has developed a number
of resources and tools to assist taxpayers and
retirement professionals who may be involved
in these transactions. The IRS has developed
a chart illustrating the types of rollovers that
are permitted between the various types of
plans. As the chart illustrates, there are special
rules for certain types of retirement plans.
For example, an individual’s designated Roth
account in an employer’s plan may only be
rolled over to another Roth plan or a Roth
IRA. If you know the type of plan holding your
clients’ retirement assets, you can obtain a quick
snapshot of the types of plans that may accept
a rollover of those assets using this IRS chart.
The chart, along with frequently asked questions
about rollovers and other information, is available
on the IRS website.
Rollover chart:
http://www.irs.gov/pub/irs-tege/rollover_
chart.pdf
Rollover FAQs:
http://www.irs.gov/Retirement-Plans/Plan-
Participant,-Employee/Retirement-Topics---
Rollovers-of-Retirement-Plan-Distributions
3. Evaluate the role of IRA rollovers in your
business model.
If you are not currently pursuing rollovers in your
practice, you may want to review whether there
is an opportunity to add IRA rollover support to
your business model, depending upon your role
with respect to the retirement plans you support.
As a result of the aging baby boomer population,
the volume of IRA rollovers is expected to
increase. And IRAs are a key component of many
retirement income strategies. If you provide IRA
investment support today for clients, be sure to
inquire about employer retirement plans that may
have rollover potential.
If you decide to pursue rollovers, you will need to
determine the impact on any fiduciary services
you provide (See Action #1). You will also need to
pay close attention to any legislative or regulatory
developments on the definition of fiduciary so
you understand how potential rule changes can
impact your business model.
As you evaluate your rollover services, include
a review of the broader rollover services that
may be appropriate for your clients. For example,
many plans have adopted a plan feature that
enables the plan sponsor to distribute balances
of not more than $5,000 owned by former
employees. If these mandatory distributions are
greater than $1,000 (but not more than $5,000),

8. 8
IRAS & THE ERISA FIDUCIARY RULES
the balance may be distributed from the
plan but must be rolled to an IRA, unless the
former participant elects a different option.
These rollovers are often referred to as “automatic
rollovers.” This feature can help plan sponsors
control plan costs by reducing the burden of
administering these small balances and tracking
terminated employees with small balances.
It is important to understand the scope of
mandatory distribution and automatic rollover
services available through your network
of service providers.
MG Trust, a Broadridge Company, offers a wide
range of IRA services, including administration
of automatic rollovers. To learn more about MG
Trust’s IRA services contact Janet Moore at
+1 720 956 5445 or janet.moore@broadridge.com.
Broadridge’s Marketing Communications
solutions group also provides a platform for client
communications. These offerings include paper
statements, e-delivery, confirms, enrollment kits,
storage and more. To learn more about these
services contact Broadridge at +1 888 237 1900.
Action #3: Monitor New Developments
Staying abreast of legislative and regulatory
developments is critical to the success of any
advisor working in the retirement industry. This
is especially true with respect to the evolving
guidance regarding the ERISA fiduciary definition
and IRA rollovers. Listed below are three
resources that you may want to tap into.
1. Matrix webinars & updates
As discussed throughout the Practice Guide,
the fiduciary issues are in a state of flux. Matrix
will be monitoring these issues carefully and
anticipates upcoming webinars and articles
as new developments occur. Watch for emails
from Matrix with details on webinars and other
materials. To get on the Matrix email list for
updates, contact the Matrix advisor help desk at
+1 866 935 6824.
In the meantime, you can stay up-to-date on
fiduciary issues by accessing the free resources
referenced in 2 and 3 below.
2. DOL newsletter
The best resource for staying current with
regulatory developments on fiduciary issues is
the DOL itself. The Assistant Secretary for the
Employee Benefits Security Administration at the
DOL provides a bi-weekly newsletter covering the
DOL’s initiatives on a variety of topics, including
the anticipated fiduciary regulations. Subscribe to
this newsletter, Before It’s Too Late: A Retirement
Security Update From Assistant Secretary Phyllis C.
Borzi, to receive first-hand information.
To subscribe to the newsletter, go to:
https://public.govdelivery.com/accounts/
USDOL/subscriber/new?topic_id=USDOL_422
3. GAO report on rollovers
If you haven’t reviewed the Government
Accountability Office (GAO) report on rollovers,
401(k) Plans: Labor and IRS Could Improve the
Rollover Process for Participants, you may want
to learn more about what the GAO found when
they posed as consumers and contacted service
providers to obtain information about retirement
plan distribution options. The GAO conducted
the study to identify challenges participants may
face in understanding their distribution options
and implementing rollovers.
You can access the GAO report at
http://www.gao.gov/assets/660/652881.pdf
4. Congressional letter to acting DOL
Secretary Seth Harris
The June 14, 2013 letter from members
of the Congressional Black Caucus and the
Congressional Hispanic Caucus to acting
Department of Labor Secretary Seth Harris raised
concerns about the DOL’s re-proposal of the
fiduciary definition regulations. This letter
is one example of the criticism certain members
of Congress have directed toward the DOL’s
fiduciary initiative.
You can obtain a copy of the letter at
www.financialservices.org/uploadedFiles/FSI-
Letter-to-DOL-on-Fiduciary-Redefinition-2013.
pdf

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Matrix Financial Solutions Broadridge Financial Solutions, Inc.
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+1 877 731 3947
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