Edmunds.com and IRA Rollover Comparisons

A Proper Best Interest Comparison of Plan Versus an IRA for Rollovers

The Department of Labor’s best interest process requires a comparison of the costs, investments and services
in a participant’s 401(k) plan with the costs, investments and services in a rollover IRA, in light of the participant’s
personal needs and objectives.
That is explained in the preamble to Prohibited Transaction Exemption (PTE) 2020-02:


With respect to recommendations to roll assets out of an Title I Plan and into an IRA, the factors that a
Financial Institution and Investment Professional should consider and document include the following: The
Retirement Investor’s alternatives to a rollover, including leaving the money in his or her current employer’s
Plan, if permitted, and selecting different investment options; the fees and expenses associated with both the Plan and the IRA; whether the employer pays for some or all of the Plan’s administrative expenses; and the different levels of services and investments available under the Plan and the IRA.

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