DOL to Allow Small Fees for Auto 401(k) Portability Transfer (1)

Companies that automatically transfer a worker’s former, small-dollar retirement account into an active plan could charge “reasonable compensation” as long as they comply with a new US Labor Department proposed exemption.

DOL’s Employee Benefits Security Administration issued a proposed prohibited transaction class exemption (RIN No. 1210-AC21) Thursday that would codify retirement portability service options Congress authorized under the SECURE 2.0 Act (Pub. L. No. 117-328) in December 2022.

The proposal would clear the way for more firms to begin facilitating automatic individual retirement account transfers by charging small percentages of the accounts they move. Plan portability ...