DOL Expects Credits, Not Rebates, to Avoid PTE 77-4 Double Dipping
Did you know that DOL expects PTE 77-4 to be followed literally, requiring management fees to be credited, rather than rebated, to avoid double dipping?
While "that is an old position," some in the industry have "assumed that as long as you donít charge double fees, you can do it anyway you want," said Rick Matta of Groom Law Group. But, he noted, PTE 77-4 is fairly clear: "You either waive, or you credit." And, he added, the credit should be a bookkeeping offset, "in other words, you invoice a reduced amount."
The good news for those that have been rebating: DOL has been willing to grant individual PTEs permitting continued rebating. See, for example, the individual PTE recently obtained by Comerica Bank.