Market compensation survey to help firms satisfy ‘reasonable compensation’ standard under new DOL rule

The Insured Retirement Institute (IRI) announced at its annual meeting in Colorado Springs this week that it will conduct a survey of compensation practices regarding sales of annuities and other investment products.

The results of this survey will support efforts by financial services firms and financial professionals to comply with the reasonable compensation standard under the Department of Labor’s (DOL) fiduciary rule. IRI is partnering with Milliman, Inc. on this initiative.

“We remain committed to assisting members with their ongoing efforts to prepare to implement the rule and operate under its new requirements,” IRI President and CEO Cathy Weatherford said. “While we believe our members’ have always strived to design their compensation practices in an appropriate and reasonable manner, demonstrating compliance with this new legal requirement is another matter. Overcoming this hurdle is a significant undertaking, and we are proud to be able to deliver this tool to help our members make this determination.”

Any firm or financial professional seeking to provide investment advice to retirement savers in accordance with either the new Best Interest Contract (BIC) Exemption or amended Prohibited Transaction Exemption (PTE) 84-24 must make a determination that the amount of compensation to be received for that advice is reasonable. When issuing these exemptions, the DOL declined to provide “specific examples of ‘reasonable’ amounts or specific safe harbors,” noting instead that reasonable compensation is “a market based standard.” The survey, which will be conducted in the coming weeks, will provide information firms can use as they assess whether their existing compensation structures are “reasonable” compared to others in the marketplace.

Milliman, one of the world’s largest actuarial consulting firms, will independently conduct the survey on behalf of IRI.

“Since its inception, Milliman has provided independent perspective and industry-leading tools to the financial services industry, and our work with IRI is the latest example of this pioneering spirit,” said Milliman Principal and Consulting Actuary Dan Rueschhoff. “This tool will assist financial institutions in transparently demonstrating compliance with the DOL’s fiduciary rule.”

For more information on IRI’s compensation survey, contact Kelly Rabin with Milliman at 206-504-5720 or[email protected].

About the Insured Retirement Institute: The Insured Retirement Institute (IRI) is the leading association for the retirement income industry. IRI proudly leads a national consumer coalition of 40 organizations, and is the only association that represents the entire supply chain of insured retirement strategies. IRI members are the major insurers, asset managers, broker-dealers/distributors, and 150,000 financial professionals. As a not-for-profit organization, IRI provides an objective forum for communication and education, and advocates for the sustainable retirement solutions Americans need to help achieve a secure and dignified retirement. Learn more

About Milliman: Milliman is among the world’s largest providers of actuarial and related products and services. The firm has consulting practices in healthcare, property & casualty insurance, life insurance and financial services, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. For further information, visit