What Belongs in a PTE 2020-02 Rollover Disclosure Form for Advisors

For financial advisors and compliance professionals, the PTE 2020-02 rollover disclosure form is now an essential core document whenever you recommend a rollover and expect to be compensated. Proper preparation, structure, and documentation are vital—both to demonstrate adherence to DOL requirements and to withstand regulatory scrutiny. Below, we detail precisely what belongs in every advisor’s PTE 2020-02 rollover disclosure template, drawing directly from the exemption text, DOL guidance, and common audit practices. If you want to avoid costly gaps and streamline your workflows, this checklist and guide will ensure your process aligns with current compliance expectations and industry best practices.

Defining the PTE 2020-02 Rollover Disclosure Form

The PTE 2020-02 rollover disclosure form (sometimes called a template) is a required, written document that financial institutions and their professionals must provide to retirement investors before completing a covered rollover. It serves as the core evidence that your advice meets DOL’s best interest standard and that the transaction qualifies for the prohibited transaction exemption (PTE), allowing for otherwise prohibited compensation.

PTE 2020-02 applies when an advisor offers a recommendation to a participant or beneficiary of an ERISA-covered plan (like a 401(k), 403(b), or 457 plan) regarding rolling assets to an IRA or another plan, and the advisor or firm receives direct or indirect compensation. Providing this disclosure—fully completed, signed, and delivered before the transaction—is fundamental to maintaining exemption status and audit readiness.

Checklist: What to Include in a PTE 2020-02 Rollover Disclosure Form or Template

Every compliant template must reflect the following elements, both for regulatory defensibility and operational clarity.

1. Client and Account Identification

• Client full name, address, and contact details
• Plan sponsor (employer) name and plan name (example: "ABC Corp 401(k) Plan")
• Plan type: 401(k), 403(b), 457, SIMPLE, SEP, or other
• Current plan account number or unique internal identifier
• Proposed receiving account type (IRA, advisory account, brokerage account, etc.)
• Proposed custodian or financial institution
• Date of recommendation and date of disclosure delivery (must predate rollover execution)

2. Fiduciary Status Acknowledgment

• Clear written statement acknowledging fiduciary status for the advisor and the firm, under ERISA/Internal Revenue Code for the rollover recommendation
• Reference to PTE 2020-02 as a prohibited transaction exemption permitting compensation if conditions are met
• Description of care and loyalty obligations as required by DOL rules

3. Scope of Services and Relationship

• Description of specific services to be provided post-rollover (portfolio management, monitoring, planning, digital access)
• Summary of services available within the current employer plan (managed accounts, advice, educational resources)
• Material limitations on services (investment restrictions, platform limitations, minimums)

4. Fees, Expenses, and Compensation

Current Plan

• Investment expense ratios for client’s holdings
• Plan-level administrative fees (asset-based, flat fees, per-participant costs)
• Transaction fees (trading costs, loan fees, etc.)
• Statement of who pays administrative expenses (employer, participant, both)

Proposed Account

• Advisory fee schedule (example: 1.00% AUM fee)
• Expense ratios for recommended investments
• Platform, custodial, or wrap fees
• Transaction or trading costs in new account
• Additional features and associated costs if relevant (annuity charges, surrender schedules)

Compensation Structure and Conflicts

• Disclosure of advisor and firm compensation (fees, commissions, salary structures)
• Description of any differential or third-party compensation
• Disclosure of all material conflicts of interest related to compensation structure

5. Alternatives and Side-by-Side Comparison

• Document all alternatives: leaving money in current plan, rolling to a new employer’s plan, rolling to a different IRA provider, taking a distribution
• Comparison of fees and expenses across all alternatives
• Documentation of employer payment for plan expenses and changes post-rollover
• Comparison of services and investment options between the plan, proposed account, and alternatives

6. Best Interest Analysis and Written Rationale

• Client circumstances: age, employment status, balance, objectives, risk profile
• Factor-by-factor written analysis (fees, services, employer payments, special features)
• Explicit rationale if costs rise, including why added costs are justified (personalization, additional services, etc.)
• Balanced discussion of both pros and cons, including loss of specific plan features (e.g., institutional shares, loans)
• Free-text area for tailored narrative

7. Conflicts of Interest and Mitigation

• List of material conflicts related to the specific recommendation and proposed products/services
• Summary of firm policies and procedures to identify, disclose, and mitigate conflicts
• Statement attesting that no misleading statements regarding transactions, compensation, or conflicts are made

8. Investor Acknowledgments and Signatures

• Statement that the investor has reviewed and received fiduciary acknowledgments, fee and service details, conflicts disclosures, and best interest rationale
• Fields for investor and advisor signatures and dates
• Optional: Initials next to key sections

9. Documentation and Recordkeeping

• Required retention period (typically 6-7 years or as per firm policy)
• Checklist of supporting documents: Form 5500 data, fee disclosures, plan statements, product illustrations
• Instructions on where (CRM, DMS, or compliance software) and how documentation should be stored
• Reference to annual retrospective review process under PTE 2020-02

10. Minimum Data Fields the DOL Expects to See Documented

• Plan identification (sponsor, name, type)
• Current and projected account balances
• Current investment lineup and expense ratios
• All relevant plan and IRA fees, including employer payments
• Participant status (employed, retired, etc.)
• Available distribution options
• Proposed IRA details (custodian, fees, investment universe)
• Client goals and constraints

When certain data is unavailable, the form should record the advisor’s good-faith efforts to obtain it and logical assumptions used.

Step-by-Step: Practical PTE 2020-02 Rollover Disclosure Workflow

1. Pre-Meeting Data Gathering
   • Collect Form 5500 data for fee and plan information
   • Prepare core client, plan, and proposal details in advance
2. Structured Client Discovery
   • Use the disclosure form as a checklist to gather employment status, objectives, plan services, and fee arrangements
3. Side-by-Side Comparison
   • Complete head-to-head evaluation of costs, service levels, and investment choices
   • Quantify long-term cost impact if applicable
4. Drafting the Best Interest Rationale
   • Address all required DOL factors and alternatives
   • Explain both advantages and disadvantages in the narrative
5. Client Delivery and Review
   • Provide the completed form to the client for review and signature before proceeding with the rollover
   • Store signed document and supporting materials for compliance
6. Supervisory and Retrospective Review
   • Supervisors periodically review completed forms for thoroughness and regulatory alignment
   • Annual sample of rollover files to ensure continued PTE 2020-02 compliance

Avoiding Common Gaps in PTE 2020-02 Rollover Documentation

Audit experience shows that many firms stumble in repeatable ways. Ensure your form and process do not miss:

• Fiduciary acknowledgment explicitly for firm and advisor
• Complete fee/expense comparison—plan, IRA, and employer-paid costs
• Side-by-side alternatives analysis supporting best interest rationale
• Balanced justification (not just pro-IRA arguments)
• Specific conflicts disclosures, tied to actual compensation and product selection
• Systematic, accessible recordkeeping supporting easy audit retrieval

For more on what DOL examiners focus on, see our in-depth post: What a DOL Auditor Will Ask For in a Rollover File (PTE 2020-02): A Practical Checklist.

Operationalizing with Technology: Standardization and Time Savings

Efficiency, compliance consistency, and thorough audit files require both robust templates and a disciplined workflow. Many advisors now automate key steps by leveraging solutions like Simple Advisor Tools:

• Instant Form 5500 plan lookup—search 500,000+ plans, autopopulate data fields
• Automated fee and service comparisons, documented for every analysis
• Required factors and best interest narrative built into each report
• Audit-ready PDF documentation and secure, 7-year electronic retention
• Integrated team workflows supporting compliance, review, and electronic signature collection

Firms using automated documentation solutions often reduce rollover file prep from several hours to approximately 10–15 minutes per case, all while virtually eliminating missing disclosures or incomplete fields. This workflow supports compliance officers needing to conduct annual reviews and deliver defensible audit files. For more, see How Advisors Can Track Rollover Advice History Without Losing the Audit Trail and PTE 2020-02 Disclosure Automation: Sample Language, Required Fields, and an Advisor Review Checklist.

Best Practices: PTE 2020-02 Rollover Disclosure Template and Process

• Integrate checklists, prompts, and tables—elimin