July 21, 2015

Office of Regulations and Interpretations via Electronic Mail

Office of Exemptive Determinations

Employee Benefits Security Administration

U.S. Department of Labor

200 Constitution Avenue, NW

Washington, DC  20210

Re: 1. Definition of the Term “Fiduciary;” Conflict of Interest Rule‐Retirement Investment

Advice [RIN 1210—AB32]

2. Proposed Best Interest Contract Exemption [ZRIN 1210—ZA25]

3. Proposed Amendment to and Proposed Partial Revocation of Prohibited Transaction

Exemption

(PTE) 84‐24 for Certain Transactions Involving Insurance Agents and Brokers, Pension

Consultants, Insurance Companies and Investment Company Principal Underwriters

[ZRIN 1210—ZA25]

To Whom It May Concern:

On behalf of our 2.4 million members, Thrivent Financial for Lutherans offers comments on the

notice of proposed rulemaking concerning the definition of the term “Fiduciary” (the “Proposed

Regulation”), the proposed Best Interest Contract Exemption, and the proposed Amendment to

and Partial Revocation of Prohibited Transaction Exemption 84‐24 (collectively referred to as the

“Proposal”) by the U.S. Department of Labor (the “Department”).    

This comment letter is divided into two parts.  The first part provides the Department with

background on Fraternal Benefit Societies and Thrivent Financial for Lutherans.  We then provide

the Department with specific comments and requests on a range of issues.

We appreciate this opportunity to respond to the Department’s proposals.  Thank you for your

kind attention to our comments.
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July 21, 2015

Page 2

BACKGROUND ON THRIVENT FINANCIAL FOR LUTHERANS AND FRATERNAL BENEFIT SOCIETIES

As a fraternal benefit society exempt from federal income tax under section 501(c)(8) of the

Internal Revenue Code, Thrivent Financial for Lutherans is a not‐for‐profit membership

organization of Christians, primarily Lutherans.  Fraternal benefit societies, like Thrivent, differ

from other financial services firms in several striking ways.  Fraternals are required by law to

offer their members insurance protection issued by the fraternal; and help them carry out

religious, benevolent, social, educational and other similar activities through their grassroots

lodge system.  Connecting financial security with generosity and service is a hallmark of the

fraternal model – we believe that the more secure our members are, the more generous they are

with their time, talents and treasures – and the fraternal model helps them achieve both.  

Members of a fraternal benefit society are required to share a common calling or avocation –

Thrivent, for example, will only accept as members Christians, their spouses and their minor

Christian children.  Fraternals are also required to bring their members together in local fraternal

lodges to conduct religious, benevolent, social, educational and other similar activities.  For

example, in 2014 alone, Thrivent and its members, operating through their fraternal lodges,

raised/donated $209.8 million and generated 10.7 million volunteer hours to support

communities, churches and individuals in need.   

The origin of fraternal benefit societies in the United States dates back almost 150 years.  

Fraternals were created because individuals who shared a common bond and a desire to serve

their neighbors in need banded together.  Throughout the rich history of fraternal benefit

societies, their member‐led lodges and the religious and benevolent activities have been funded

in large part through the sale of insurance and financial products to fraternal lodge members.  

Fraternal benefit societies have taken on an increasingly vital role in community service,

identifying and meeting local needs that otherwise might go unmet.  In fact, according to a

recent study of the economic input of fraternal benefit societies in communities, fraternal

benefit societies have been estimated to provide $3.8 billion in societal benefit annually – that is

a 76‐fold return on the public investment in this increasingly important model.1

  This benefit

includes the value of social capital which is generated from fraternal members serving together

and building sustainable relationships to strengthen communities from the inside out, on the

grassroots level.

The history of fraternal benefit societies and the significant religious and benevolent activities

fraternal members engage in through their local lodges help explain why Congress exempted

them from federal income tax in 1909 and has maintained that exemption since then: Congress

recognized then and now that fraternal benefit societies are unique.

                                                            

1 Economic Contributions of Fraternal Benefit Societies: A Five Year Perspective, Phillip Swagel, School of Public

Policy, University of Maryland (July, 2014)
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For more than a century, Thrivent has helped our members be wise with money and live

generously in support of their congregations and communities.  We largely serve individuals and

families of modest means who want to connect their faith and finances for good.  Thrivent offers

a broad range of financial products and services, including life insurance, annuities, disability

insurance and long term care coverage to our members.  We also distribute mutual funds

through a subsidiary.  These proprietary products offered to our membership through the

tailored guidance of our licensed and captive financial representatives nationwide serve as the

basis through which we exist as a fraternal benefit society and as the economic engine that helps

us fulfill our fraternal mission of service to our members and their communities.  

Thrivent Financial believes that financial professionals or organizations that provide financial

guidance to a plan, plan participants/beneficiaries and IRA owners regarding plan and IRA assets

should be subject to a best interest standard of care.  We believe, however, that, as proposed,

the Proposal will increase costs to consumers, create yet another barrier for middle and lower

income families to access professional, individualized or specifically directed investment advice

for saving and investing their assets, and generate a barrage of disclosures, many of which

duplicate disclosures already required by the Securities and Exchange Commission (“SEC”) and

the Financial Industry Regulatory Authority (“FINRA”).  In particular for Thrivent, increased costs

reduce its ability to fund its members’ religious and benevolent activities.  Congress appears to

have understood this inverse connection between costs and benevolence when it exempted

fraternal benefit societies from federal income tax.   

In addition, Thrivent, like other fraternal benefit societies, focuses on helping persons of modest

means.  The median size of our IRAs (our primary concern, as fraternals cannot issue group

coverages) is $25,000.  Moreover, more than half of the members we serve with IRAs have

annual household incomes of less than $75,000.  These are the people who will be most affected

if we cannot find a way to make the Proposal workable.  To avoid unintended consequences of

the Proposal, Thrivent respectfully submits the following comments and offers alternative

approaches that acknowledges and adheres to a best interest standard of care and provides

meaningful disclosures to investors.

SPECIFIC COMMENTS ON THE PROPOSAL

PROPOSED REGULATION SECTION 2510.3—21 (DEFINITION OF “FIDUCIARY”)

1. Fraternal Exemption from Definition of “Fiduciary”

We request further consideration by the Department for an additional “carve‐out” to be added

to the definition of “Fiduciary” that recognizes the unique nature, requirements and

governance of fraternal benefit societies.

Thrivent Financial is a fraternal benefit society governed by our own members and required by

the federal tax code and laws in all fifty states to not only provide insurance and other benefits to

our members, but also to bring together members and coordinate those members “in work that
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is of a fraternal and beneficial character.”2  It is a system deeply embedded in our nation’s history

and laws. Congress and the states have chosen to keep it in place for more than a century—and

with good reason: fraternal benefit societies provide great benefits not only to their members,

but to the country as a whole. 

The good work that Thrivent Financial and its members perform is supported by the sale of our

proprietary products.  By law, fraternal benefit societies must provide their members with their

own “fraternal insurance products” (which includes annuity contracts that are commonly utilized

in retirement plans and IRAs).  It is the sale of these products that provide the funding that fuels

the local lodges and charitable activities that fraternal benefit societies and their members carry

out.  As stated earlier in the fraternal background section of this letter, providing proprietary

products to their members is a fundamental basis for the existence of fraternal benefit societies

and necessary for the success of their contribution to the public well‐being across the country.  A

recent academic study concluded that the tax exemption of fraternal benefit societies enabled

them to provide a $3.8 billion yearly benefit to communities.3

We appreciated the opportunity to discuss our unique concerns as a fraternal benefit society

with the Department during the comment period.   This included a discussion of how fraternals

differed from other financial institutions and how they might be more appropriately treated

under the Proposed Rule.  We were told that the Department staff did try to accommodate

unique situations (like those of Thrivent) where appropriate.  The example given was for

organizations with over 100 employees – the justification being the employer is in a position to

assure that the best interests of its employees are met.

An analogous situation exists with the unique fraternal governance structure of Thrivent. We are

required to be governed by our members. Thrivent members nominate and elect our national

board of directors – all of whom are members of our society who own a proprietary insurance or

annuity product. In addition, our unique lodge structure provides governance by our members at

a local level. The oversight provided by our member board is robust and engaged, with the board

providing oversight on key issues impacting our members – from financial strength to product

line up to sales practices to religious and benevolent activities.  

Given the unique relationship of a fraternal benefit society to its members, as well as the

differences in our structure and governance, we would appreciate additional consideration of a

possible exception under which the sale of a fraternal insurance product will not result in

either the financial professional or the financial institution being considered to be a

fiduciary.   The basic idea would be the same as that for large employers – the fraternal

organization would be in a position to be able to assure that the best interests of its members

were served.   Of course, we would be open to considering additional structures, processes or

                                                            

2 Nat'l Union v. Marlow, 74 F. 775, 778‐79 (8th Cir. 1896) (cited in, inter alia, I.R.S. P.L.R. 201320023 (May 17, 2013)). 3 See Footnote 1, above.
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disclosures that might help the Department or other regulators define how this is best

accomplished.

2. Modification to the Seller’s Carve‐Out

We are concerned that the Department’s proposed definition of a “fiduciary” is over‐reaching,

particularly where it redefines the scope of activities that constitute rendering “investment

advice.”  The Proposal appears to arbitrarily and inappropriately exclude small investors and the

use of asset allocation models accompanied by required disclosures from the list of available

“carve‐outs.”

Subsection (b)(1)(i)(B)(1)4 provides a “carve‐out” for transactions with plan fiduciaries with

financial expertise.  This “seller’s carve‐out” is not available, however, to retail investors – small

plans, plan participants/beneficiaries and IRA owners.   

We ask the Department to modify the rule so that the seller’s carve‐out can apply with respect

to transactions with any retail customers that satisfy the accredited investor criteria used by

the federal securities laws to measure financial sophistication (annual income of more than

$200,000 ($300,000 with a spouse) or who have a net worth of more than $1,000,000).   

The Proposal appears to inappropriately exclude small investors and the use of asset allocation

models accompanied by required disclosures from the list of available “carve‐outs.”  We believe

the definition of “small plan” suggested in the DOL’s request for comments5 is arbitrary and

inconsistent with other, long‐standing definitions in securities law.   

3. Modification of Investment Education Carve‐Out

Subsection (b)(6) provides a “carve‐out” for Investment Education.6  While this carve‐out

incorporates most of the relevant text of Interpretive Bulletin 96‐1, there are some significant

changes.  One such change is not incorporating the language in IB 96‐1 that permitted the use of

asset allocation models that refer to specific products available under the plan or IRA, as long as

those references are accompanied by a statement that other investment alternatives having

similar risk and return characteristics may be available.

We ask the Department to restore the provisions in subsections (d)(3)(iii) and (4)(iv) of IB 96‐1

to the Investment Education carve‐out.

                                                            

4 Fiduciary Rule Notice, 80 Fed. Reg. 21957.   5 “Comments on the scope of the seller’s carve‐out and whether the plan size limitation of 100 plan participants and

100 million dollar asset requirement in the proposal are appropriate conditions or whether other conditions would

be more appropriate proxies for identifying persons with sufficient investment related expertise to be included in a

seller’s carve‐out.” 6 Fiduciary Rule Notice, 80 Fed. Reg. 21958.  
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The inability to utilize asset allocation models that identify specific investments makes the

Investment Education carve‐out less effective (when compared to IB 96‐1), at best, and

counterproductive, at worst.  Investors expect that the education provided by their advisers will

leave them with enough information to make informed investment decisions on their own.  The

inability to identify specific investments will prevent this from happening.

4. Clarify that Routine Statements are not “Investment Advice”

We ask the Department to clarify and expressly state that providing routine statements falls

under the carve‐out provided in Subsection (b)(5)(iii) and is not an activity deemed to be

investment advice.

Subsection (a)(1)(iii) enumerates the types of activities that would be considered rendering

investment advice.7

  However, subsection (b)(5)(iii)8 provides a “carve‐out” from the definition of

“investment advice” for statements of value that are used to comply with regulatory reporting

and disclosure requirements.  As written, it is unclear whether a routine statement containing

account valuation information to a plan participant/beneficiary or IRA owner would be

considered “investment advice” and trigger onerous hurdles for a Retirement Investor to cross in

order to receive necessary, educational retirement information prior to investing her assets.  It

would be helpful to distinguish between a “routine statement” and the enumerated items listed

in subsection (b)(5)(iii).

COMMENTS AND REQUESTS ON THE PROPOSED BEST INTEREST CONTRACT EXEMPTION

We fully appreciate that the Department sought to create an avenue for financial institutions and

financial professionals to continue to receive compensation for providing quality investment

advice to retirement investors.  However, the ambiguity within the Best Interest Contract

Exemption, as it is currently proposed, falls short of being able to “flexibly accommodate a wide

range of current business practices, while minimizing the harmful impact of conflicts of interest

on the quality of advice.”9  We offer several comments on this proposed exemption and

recommend alternative approaches that honor a best interest standard of care and provides

meaningful disclosures to retirement investors.

                                                            

7 Subsection (a)(1)(iii) provides that the following type of advice is considered to be investment advice: “An

appraisal, fairness opinion, or similar statement whether verbal or written concerning the value of securities or

other property if provided in connection with a specific transaction or transactions involving the acquisition,

disposition, or exchange, of such securities or other property by the plan or IRA.” 8 Subsection (b)(5)(iii) provides: “A plan, a plan fiduciary, a plan participant or beneficiary, an IRA or IRA owner solely

for purposes of compliance with the reporting and disclosure provisions under the Act, the Code, and the

regulations, forms and schedules issued thereunder, or any applicable reporting or disclosure requirement under a

Federal or state law, rule or regulation or self‐regulatory organization rule or regulation.” 9 Fiduciary Rule Notice, 80 Fed. Reg. 21961.
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Section I – Best Interest Contract Exemption

1. Applicability of Best Interest Contract Exemption to constituent parts of rollover and

conversion process

Subsection (b) of the Best Interest Contract Exemption describes the applicability of the

Exemption to certain transactions.10  Section I(b)(1) limits covered advice to: “[a] participant or

beneficiary of a Plan subject to Title I of ERISA with authority to direct the investment of assets in

his or her Plan account or to take a distribution[.]”

We ask the Department to clarify that all parts of the rollover and conversion process are

covered under the Best Interest Contract Exemption.   

We are concerned that some of the component parts of a rollover recommendation might not be

covered under the Best Interest Contract Exemption.  While it is clear that the Best Interest

Contract Exemption covers the recommendation of how to invest the assets in the rollover IRA, it

is not clear that it covers recommendations to take distributions and/or recommendations to

rollover distributions.  Similarly, when dealing with IRA conversions, it is also not clear if the Best

Interest Contract Exemption covers recommendations to take distributions and/or

recommendations to convert distributions.   

The Preamble to the final rule includes the following:  

The market for retirement advice has changed dramatically since the Department

first promulgated the 1975 regulation.  Individuals, rather than large employers

and professional money managers, have become increasingly responsible for

managing retirement assets as IRAs and participant‐directed plans, such as 401(k)

plans, have supplanted defined benefit pensions.11   

As the availability of guaranteed retirement income through employer‐sponsored plans has

declined, individuals have turned to individual annuity products through the IRA rollover market

to secure a source of guaranteed income past retirement.  A broad selection of annuity products

are available, including relatively simple single premium deferred annuities.  Consumers benefit

                                                            

10 Subsection (b) provides: “Covered transactions. This exemption permits Advisers, Financial Institutions, and their

Affiliates and Related Entities to receive compensation for services provided in connection with a purchase, sale or

holding of an Asset by a Plan, participant or beneficiary account, or IRA, as a result of the Adviser’s and Financial

Institution’s advice to any of the following ‘Retirement Investors:’

(1) A participant or beneficiary of a Plan subject to Title I of ERISA with authority to direct the investment of

assets in his or her Plan account or to take a distribution;  

(2) The beneficial owner of an IRA acting on behalf of the IRA; or

(3) A plan sponsor as described in ERISA section 3(16)(B) (or any employee, officer or director thereof) of a

non‐participant‐directed Plan subject to Title I of ERISA with fewer than 100 participants, to the extent it

acts as a fiduciary who has authority to make investment decisions for the Plan.” 11 Fiduciary Rule Notice, 80 Fed. Reg. 21932.   
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from being able to use the rollover process to access these types of retirement products.  

Because, as the Preamble points out, individuals are becoming increasingly responsible for

managing their investments, and because defined benefit pensions are increasingly unavailable

to employees, Thrivent believes that now, more than ever, it’s important for consumers to have

the ability to have guidance and help through the entire rollover and conversion process.  

Clarifying that the Best Interest Contract Exemption covers the entire rollover and conversion

process will help preserve this ability for consumers.  

2. Availability of Best Interest Contract Exemption to Small Plans

Section I(b)(3) limits covered advice to plan sponsors of “non‐participant‐directed Plans...with

fewer than 100 participants...”12  We are concerned that this limitation will stifle the growth of

plans, especially within the small‐plan market.   

We ask the Department to expand the coverage under the Best Interest Contract Exemption to

include investment advice provided to plan sponsors of small participant‐directed plans.

Many of our members are owners of small businesses.  They often look to our financial

professionals for guidance on how to provide employer‐provided benefits for their

employees.  Based on their experience, we know that establishing a participant‐directed plan,

especially a small plan, is a multi‐step process. First, the employer makes the decision to adopt

the plan. Then the employer/plan fiduciary determines the investment menu. Finally, the

participants make their investment decisions from the available products on the investment

menu.

All of these steps have to happen, in chronological order.  Participants cannot make investment

decisions until the employer (i) adopts the plan and (ii) determines the investment menu. To

make the administration of a small participant‐directed plan efficient and cost‐effective for

participants, there will almost always be a limited investment menu.  The participants will have

10 or 20 or 30 choices, rather than hundreds or thousands of options.

We are concerned that if the recommendations a financial professional provides to the

employer/plan fiduciaries to set the investment menu is not covered by the Best Interest

Contract Exemption, financial professionals will not able to provide quality educational

information and recommendations with respect to setting the plan’s investment menu and be

compensated for their financial expertise and professional guidance.  An unintended

consequence, and an avoidable one, is that employer/plan fiduciaries who do not receive advice

for setting the investment options, will be, in all likelihood, reluctant to adopt the plan or ill‐

equipped to do so absent such professional financial guidance.

                                                            

12 Fiduciary Rule Notice, 80 Fed. Reg. 21984.  
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The Best Interest Contract Exemption should be available for investment advice that is provided

to an employer/plan fiduciary of a non‐participant directed plan and an employer/plan fiduciary

of a participant‐directed plan alike.  There is no compelling reason to disadvantage plan sponsors

of small participant‐directed plans by prohibiting financial professionals from using the Best

Interest Contract Exemption when providing investment advice.  Both groups value the advice

provided by financial professionals and need that advice to prudently invest plan assets held on

behalf of plan participants and/or to determine an investment menu.

Section II – Contract, Conduct, and Other Requirements

As a not‐for‐profit membership organization, Thrivent values its relationship with its members.  

We understand the importance of the initial interactions and discussions with prospective clients

and know that the relationship will evolve over time as the needs of the client evolve.  With this

focus, we seek clarification on a number of provisions and offer several enhancements to the

Section II provisions.

1. Entry into Best Interest Contract

Subsection II(a) requires that prior to recommending the purchase, holding or sale of an asset,

the financial institution and the financial professional enter into a written contract with the

retirement investor.13  We offer four comments on this subsection.

First, we ask the Department to require the Best Interest Contract to be entered into prior to

the time a transaction occurs rather than prior to making any recommendation.   

At the beginning of any financial professional‐investor relationship, initial conversations allow

the parties to engage in fact‐finding, provide financial education, and discuss the products and

services the financial professional has to offer and whether they meet the objectives of the

investor.  It is not unusual for a recommendation to be made at the end of such an initial

conversation.  The requirement to have a Best Interest Contract entered into prior to making a

recommendation inhibits the normal sales advice process and will further deter some individuals

from seeking out any financial advice as getting people to initiate any action to better their

financial futures is already difficult.  Signing the Best Interest Contract prior to executing a

transaction still serves the best interests of the client while ensuring that the financial

professional and prospective client have the initial conversations to understand the prospective

client’s needs, goals, and objectives prior to formulating any investment recommendations.   

Second, we ask the Department to allow for “negative consent” approaches and electronic

signatures in lieu of a physical signature.   

                                                            

13 Subsection (a) provides:  “Contract. Prior to recommending that the Plan, participant or beneficiary account, or

IRA purchase, sell or hold the Asset, the Adviser and Financial Institution enter into a written contract with the

Retirement Investor that incorporates the terms required by Section II(b)–(e).”
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The requirement for a “written contract” creates a very difficult operational issue.  Throughout

the financial services industry, firms will be attempting to get Best Interest Contracts into place

for millions of IRA owners.  Getting physical signatures from all existing IRA owners is an

impractical solution given the extremely short timeline the Department anticipates for making

the proposed rules effective.  This requirement also presents challenges for investors who have

provided representatives and family members with durable powers of attorney to manage the

affairs of their retirement accounts. The authority provided in these circumstances are often

limited to existing rights under accounts and do not contemplate the requirement to provide a

physical signature on a new contract.  It is unclear how advisors and financial institutions would

meet the requirement for a physical signature in these cases.   

Third, we ask the Department to eliminate the requirement that the financial professional be a

party to the Best Interest Contract.

As long as the contract specifically acknowledges that the financial professional and the financial

institutions are fiduciaries acting in the best interest of the investors, having the financial

institution be a party to the contract should be sufficient.  The Proposal already requires the

financial institution to implement policies and procedures designed to ensure that it and its

financial professionals act in the best interest of the investor when providing advice to

retirement investors.  Requiring the financial professional to separately sign the contract does

not add more protection for the investor.   

Additionally, there are practical considerations to consider with requiring financial professionals

to sign the contract.  Financial professionals may work with customers either individually in a

face‐to‐face relationship, or in a call‐center with a virtual or telephone‐based relationship, or

they may work in partnership with other financial professionals as a team.  Instead of focusing on

providing sound, quality investment advice to clients, firms would be diverting resources to

obtain signatures from every financial professional servicing every client, while managing

turnover and client reassignment requests.  Including an acknowledgement of fiduciary status of

both the financial institution and the financial professional in an upfront contract is sufficient.

Finally, we ask the Department to address the problem the Best Interest Contract Exemption

poses for tax related deadlines.

The Best Interest Contract Exemption does not sufficiently address a practical and recurring

situation that many financial institutions and financial professionals face – an investor who has

good intentions to contribute to his or her IRA prior to a tax filing deadline, but waits until the

last minute to initiate the transaction.  Obtaining signatures from the financial professionals prior

to making a recommendation (along with the other significant requirements and limitations of

the Best Interest Contract Exemption) would create another barrier for the investor who (i) does

not have a Best Interest Contract in place and (ii) meets with a financial professional to receive

advice related to an IRA investment for a prior year IRA contribution.  In these instances, the best
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interests of the investor would be negatively impacted by the timing requirements of the

exemption.   

2. Subordination of Financial Interests to that of Investor

As previously stated, we generally support the Best Interest Standard contained in Subsection

II(c)(1).14  We are concerned, however, that the language seems to require the complete

disregard of any financial interest of the financial professional, financial institution, etc.  It

appears to require that any advice that is provided must totally ignore the business and

economic reality that an enterprise that is reliant on commissions and/or third party

compensation to cover its costs and/or generate a profit – cannot completely turn a blind eye to

its own business needs and hope to remain in business.  If the Best Interest Standard is meant to

require financial professionals, financial institutions, etc. to have absolutely no interest in the

transaction, we do not believe that any person or entity that receives any compensation can truly

comply.  We think a more appropriate standard is that financial professionals and financial

institutions should subordinate their own interests to that of their client, but not totally

disregard them.

We ask the Department to remove the phrase “without regard to the financial or other

interests of the Adviser, Financial Institution or any Affiliate, Related Entity, or other party”

and replace it with the phrase “and that subordinates the financial or other interests of the

Adviser, Financial Institution or any Affiliate, Related Entity, or other party to those of the

Retirement Investor.”

3. ERISA Preemption Clarification

Subsection II(d)(1) provides: “The Adviser, Financial Institution, and Affiliates will comply with all

applicable federal and state laws regarding the rendering of the investment advice, the

purchase, sale and holding of the Asset, and the payment of compensation related to the

purchase, sale and holding of the Asset” (emphasis added).15

We are concerned over the application of state law to ERISA transactions, which already fall

under federal jurisdiction.  We ask the Department to clarify that the ERISA preemption applies

for ERISA plans.

                                                            

14 Subsection (c)(1) provides: “When providing investment advice to the Retirement Investor regarding the Asset, the

Adviser and Financial Institution will provide investment advice that is in the Best Interest of the Retirement Investor

(i.e., advice that reflects the care, skill, prudence, and diligence under the circumstances then prevailing that a

prudent person would exercise based on the investment objectives, risk tolerance, financial circumstances, and

needs of the Retirement Investor, without regard to the financial or other interests of the Adviser, Financial

Institution or any Affiliate, Related Entity, or other party).” 15 Fiduciary Rule Notice, 80 Fed. Reg. 21984.  
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4. Additional Examples of Acceptable Compensation Structures

Subsection II(d)(4) proposes rules regarding compensation structures but expressly permits

“differential compensation based on [...] neutral factors.”16  The Preamble provides five examples

of “broad approaches to compensation structures that could help satisfy the contractual

warranty.”17  One of them (Example 4) illustrates Differential Payments Based on Neutral Factors.  

Pursuant to the Department’s request for comments on this issue, we ask the Department to

provide more detailed examples of acceptable compensation structures, particularly those

illustrating Differential Payments Based on Neutral Factors.

The lack of clarity around this subsection will create significant uncertainty and new roadblocks

for consumers seeking basic financial security products.  Without knowing what is considered

“reasonable compensation” to ensure compliance with the Proposal, some financial

representatives may hesitate to offer certain products that may be ideal for a member's

particular needs.  

5. Discretionary v. Non‐Discretionary Accounts

Subsection I(c)(4) excludes an Adviser who “exercises any discretionary authority or discretionary

control respecting management of the Plan or IRA assets involved in the transaction or exercises

any authority or control respecting management or disposition of the assets, or has any

discretionary authority or discretionary responsibility in the administration of the Plan or IRA.”18  

We ask the Department treat discretionary and non‐discretionary investment accounts

similarly.

Thrivent offers both discretionary and non‐discretionary investment accounts, primarily in its

investment advisory managed account program.  Both types of accounts (discretionary and non‐

discretionary) offer our members access to a broad range of investment vehicles, including

mutual funds, exchange traded funds, and general equities, as well as access to professional

portfolio managers.  Under the Best Interest Contract Exemption, the financial professional and

the financial institution would acknowledge a fiduciary status and contractually commit to

provide advice that is in the best interest of the investor, irrespective of whether the financial

professional or the financial institution has discretion over the assets in the account.  Under

these circumstances, our members with assets in both discretionary and non‐discretionary

accounts would already be protected by the terms of a Best Interest Contract.

                                                            

16 Fiduciary Rule Notice, 80 Fed. Reg. 21984. 17 Fiduciary Rule Notice, 80 Fed. Reg. 21971.   18 Fiduciary Rule Notice, 80 Fed. Reg. 21984.
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Section III – Disclosure Requirements

As we discuss below in detail, we believe that the proposed disclosure requirements should be

better aligned with existing disclosure regimes to promote efficiency and address duplication.  

We believe that much of the information requested by the Department does not exist in the

formats requested, or would need to be provided from third parties.  We further believe it would

be inappropriate for financial institutions and financial professionals to rely on third‐party data

without any ability to confirm that the data provided is accurate.  

1. Transaction Disclosure

Subsection III(a)(1) proposes a disclosure of Total Cost prior to purchase of an Asset.19  

Subsections (2)(A)‐(D) define the term “Total Cost.”   

We ask the Department to allow the Transaction Disclosure requirement for registered

securities products to be met by providing prospectuses that meet the current SEC

requirements.

We believe this requirement is particularly problematic for annuity contracts, where such a

disclosure would require the financial institution/financial professional to develop and provide a

unique disclosure specific to each investment amount for annuity products, which have costs and

expenses that are inconsistent with mutual fund costs.  In addition, the SEC has already defined

the costs and fee disclosures that must be made to investors by prospectus for registered

securities products.  The advantage of relying on prospectuses to provide these disclosures is

that their standards are well known across the securities industry and the systems necessary to

produce them are already in place.  

2. Annual Disclosure

Subsection III(b) provides: “Annual Disclosure. The Adviser or Financial Institution provides the

following written information to the Retirement Investor, annually, within 45 days of the end of

the applicable year, in a succinct single disclosure.”20  Subsections (b)(1)‐(3) set forth out the

specific information that must be included, and subsection (b)(1) requires: “[a] list identifying

each Asset purchased or sold during the applicable period and the price at which the Asset was

purchased or sold.”21   

                                                            

19 Subsection (a)(1) provides: “Disclosure. Prior to the execution of a purchase of the Asset by the Plan, participant or

beneficiary account, or IRA, the Adviser furnishes to the Retirement Investor a chart that provides, with respect to

each Asset recommended, the Total Cost to the Plan, participant or beneficiary account, or IRA of investing in the

Asset for 1‐, 5‐, and 10‐year periods expressed as a dollar amount, assuming an investment of the dollar amount

recommended by the Adviser and reasonable assumptions about investment performance that are disclosed.” 20 Fiduciary Rule Notice, 80 Fed. Reg. 21985.   21 Id.  
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We believe this information is already provided to investors, via periodic customer account

statements which are required disclosures pursuant to SEC and FINRA rules.

We ask the Department to recognize the existing disclosure regimes and eliminate or modify

the Best Interest Contract Exemption disclosure requirements to avoid unnecessary

duplication.

3. Web Page Disclosure

Subsection III(c)(1) proposes certain information that must be included on a Web page

maintained by a Financial Institution.22   

We ask the Department to examine the disclosure regime required in the Best Interest

Contract Exemption in the context of existing state and federal laws.  Information proposed by

subsections (c)(1)(A) and (B) that is already provided to retirement investors by the prospectus

and periodic customer account statements is highly duplicative and should be removed from

the requirements.

We are concerned that the requirements under the proposed rule would conflict with previously

established standards of product disclosures.  These standards include a recently developed

National Association of Insurance Commissioners (NAIC) Model Regulation that addresses

annuity disclosures.23  

It is likely that state insurance regulators could interpret the webpage disclosure as advertising

material for annuity products prompting the requirement for filing with several states’ insurance

departments.  It is also possible that the required disclosures for variable annuity products would

be considered a prospectus under federal securities law and would be required to be filed with

the SEC and FINRA.  The cumulative amount of information required to be disclosed on the

webpage presents a significant amount of information about all available investments an

individual retirement investors may purchase from the Financial Institution as if each of these

investments are similar in construction, the way in which they may be purchased, serviced and

invested.

Compiling the information in this manner on the Financial Institution’s webpage would not only

be confusing to an investor taken out of context from the investment’s prospectus and other

point of sale disclosure documents and presented as if these investments are an apples‐to‐apples

comparison when they in fact are not.  That is misleading and violates existing securities laws and

regulation.  Disclosures regarding the construction of an investment, how it is serviced, any fees

and compensation are already disclosed in product prospectuses, the SEC Form ADV brochures,

transaction confirmations and customer account statements.

                                                            

22 Fiduciary Rule Notice, 80 Fed. Reg. 21985.    23 See, e.g., The National Association of Insurance Commissioners, Annuity Disclosure Model Regulation 245‐1.  
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These existing required disclosures provide important material conflict‐related information to

retirement investors in the appropriate context of the investment for the investor.  In lieu of the

webpage disclosure requirement, we ask the Department to recommend enhancements to

existing, disclosures required by current securities regulations and rules to provide a more

meaningful disclosure to retirement investors in the context that is familiar and appropriate.  

Section IV – Range of Investment Options

1. Not All Limitations on Assets Preclude a Broad Range of Options

According to Section IV(a),24 in order to meet the eligibility requirements of the Best Interest

Contract Exemption, a Plan must offer a sufficiently broad range of assets to meet the best

interests of the Retirement Investor.  Section IV(b) goes on to state that the Best Interest

Contract Exemption is available to Financial Institutions that limit assets available for purchase

through the plan to proprietary products provided certain additional criteria are met.25   

We ask that any requirement to satisfy additional conditions be limited to Financial Institutions

that do not offer a broad range of investment options reasonably necessary to serve the Best

Interests of the investor.  

A Financial Institution that only has Proprietary Products is not precluded from having a

sufficiently large number of Proprietary Products that would enable it to offer a broad range of

investment options reasonably necessary to serve the Best Interests of the investor.  There

should be no presumption in any part of the proposed rule that a Financial Institution that

imposes limits on the products it offers (whether it be Proprietary Products, products that

generate Third Party payments, or any other limitation) is not able to offer a broad range of

investment options reasonably necessary to serve the Best Interests of the investor.

2. Additional Requirements Imposed by Section IV(b)

We are also concerned about the four additional conditions that must be satisfied under section

IV(b) by a Financial Institution that limits assets available for purchase under the plan. We

comment on each of those requirements individually below.

                                                            

24 Section IV(a) provides: “General.  The Financial Institution offers for purchase, sale or holding, and the Adviser

makes available to the Plan, participant or beneficiary account, or IRA for purchase, sale or holding, a range of Assets

that is broad enough to enable the Adviser to make recommendations with respect to all of the asset classes

reasonably necessary to serve the Best Interests of the Retirement Investor in light of its investment objectives, risk

tolerance, and specific financial circumstances.” 25 Section IV(b) states: “Limited Range of Investment Options. Section (a) notwithstanding, a Financial Institution may

limit the Assets available for purchase, sale or holding based on whether the Assets are Proprietary Products,

generate Third Party Payments, or for other reasons, and still rely on the exemption, provided that...”
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Subsection IV(b)(1)

Subsection IV(b)(1) would require a Financial Institution to make a written finding that any

limitations it imposes on assets available through the plan do not affect the best interest of the

customer.26   

The Best Interest Contract Exemption already requires the Financial Institution to affirmatively

agree to, and comply with, the Impartial Conduct Standards, including only providing investment

advice that is in the Best Interest of the investor.  Consequently, the requirement proposed in

Subsection IV(b)(1) seems to be duplicative of the overarching Impartial Conduct Standards,

specifically Section II(c)(1).  We do not believe that such a duplicative requirement affords

investors any additional protections.   

We ask the Department to eliminate this requirement.

Subsection IV(b)(2)

Subsection IV(b)(2) would require that any compensation received to be reasonable.27

Again, this requirement seems to duplicate provisions of the Impartial Conduct Standards.  

Section II(c)(2) of the proposed Exemption already requires the Financial Institution to

affirmatively agree to not recommend an asset if the anticipated compensation received would

exceed reasonable compensation.   

We ask the Department to eliminate this requirement.

In addition, the Department requires that any compensation received must be reasonable

relative to the value of the specific services provided to the Retirement Investor and not in

excess of the services’ fair market value.  Compensation that is linked only to the “services

provided to the Investor” does not appropriately contemplate other important factors of

assessing compensation, such as the features and benefits of the product that the Investor

purchases.

We ask the Department to eliminate duplicative requirements and to eliminate services‐linked

compensation requirements.

Subsection IV(b)(3)

Subsection IV(b)(3) requires disclosure of any limitations placed on Assets offered through the

Plan.28

                                                            

26 Fiduciary Rule Notice, 80 Fed. Reg. 21985, 21986. 27 Fiduciary Rule Notice, 80 Fed. Reg. 21986.   28 Id.   
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As with subsection (b)(1) and (2), subsection (b)(3) seems to repeat a requirement previously

established in section II of the proposed Exemption, section II(e)(3).  We believe that the

disclosure intended by section IV(b)(3) is already addressed by section II(e)(3), and that

duplicative disclosures may actually harm consumers by distracting them with redundant

paperwork.   

We ask the Department to eliminate this requirement.

Subsection IV(b)(4)

Subsection IV(b)(4) provides: “[t]he Adviser notifies the Retirement Investor if the Adviser does

not recommend a sufficiently broad range of Assets to meet the Retirement Investor’s needs.” 29  

We are very concerned about this condition and request that the Department eliminate it.  

We believe that this requirement is unnecessary in light of section II(c)(1), which requires

institutions and advisers to affirmatively agree to and comply with the requirement that advice

be in the best interest of the Retirement Investor.  Advice that is in the best interest of the

Retirement Investor inherently meets the Retirement Investor’s needs.  Furthermore, advice in

the Retirement Investor’s best interest should consider the Retirement Investor’s total portfolio

of assets, and consequently could result in a recommendation to purchase a narrow subset of

assets, if that is what is required to complete the portfolio.

3. Fraternal Proprietary Products

As a fraternal benefit society, we are very concerned about the additional requirements imposed

under Section IV(b) of the Best Interest Contract Exemption for financial institutions that limit

assets available for purchase to proprietary products.  As stated above, Thrivent is required by

the federal tax code and laws in all fifty states to not only provide insurance and other benefits to

our members, but also bring together members to make a broader impact in their communities.  

The good work that Thrivent Financial and its members perform is supported by the sale of our

proprietary products and through our tax‐exempt status under Section 501(c)(8) of the Internal

Revenue Code.   

For Thrivent and other fraternal benefit societies there are critical differences between

proprietary (which fraternals are required to offer by law) and non‐proprietary products.  In the

broadest terms, an individual applies to become a member of a fraternal benefit society and of a

local fraternal lodge and then may buy a fraternal benefit society’s proprietary products, if the

individual so chooses.  That individual, once admitted as a member, can then engage in a wide

variety of religious, benevolent, and other similar fraternal activities through the lodge

system.  Importantly, because fraternal benefit societies are exempt from federal income tax

under Section 501(c)(8) of the Internal Revenue Code, the sale of proprietary products generates

                                                            

29 Fiduciary Rule Notice, 80 Fed. Reg. 21986.
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Page 18

the support needed to provide for a lodge system and carry on fraternal activities.  The sale of

non‐proprietary products does not generate the same level of support for our members’

benevolent work.  

Related to these differences between proprietary products and non‐proprietary products is an

important nuance regarding a financial institution’s use of a captive salesforce.  Thrivent, as a

fraternal benefit society, needs a salesforce knowledgeable about the special religious and

benevolent activities conducted by its members.  Moreover, Thrivent believes its salesforce

should be actively engaged in and part of its fraternal lodge system.  In addition to these

fraternal requirements, Thrivent seeks to assure our field force is able to live out the Thrivent

mission of being wise with money and living generously and therefore provides valuable

employee benefits to our salesforce that would otherwise be deemed purely independent

contractors. As detailed in the footnote below, this status requires Thrivent’s field force to sell

proprietary products.30  The Department’s proposed changes to the definition of fiduciary and

the additional burdens placed on the sale of proprietary products may cause insurers, including

Thrivent, to restructure their salesforces in a manner that would strip away benefits from these

salespeople.  The Department should encourage captive salesforces such as this and the

protections afforded by the employee benefits available to them.

Thus, while we agree that investors (in this case our members) should be provided a sufficient

range of investments, we do not believe the fact that a fraternal benefit society that encourages

the sale of its proprietary products should be subject to the additional conditions set out in the

proposed rule.  Moreover, we believe that special burdens placed on the sale of proprietary

products will create a strong disincentive to Thrivent, as a fraternal, to maintain a captive

salesforce, for which Thrivent currently provides retirement and medical benefits.

We propose as an alternative to Section IV(b), that a fraternal benefit society that offer a wide‐

range of investment options be required to disclose to its members (investors) how the sale of

its proprietary products enable the fraternal and its members to strengthen their communities.

                                                            

30 The Federal Insurance Contributions Act (FICA) section of the Internal Revenue Code defines “employee” for

purposes of FICA. The definition of “employee” includes common law employees and some other categories of

workers who would not be considered common law employees, these workers are commonly known as “statutory

employees.” One of these categories is “full‐time life insurance salesm[e]n.” 26 U.S.C. 3121(d)(3)(B). The regulations

further describe the requirements to be considered a “full‐time life insurance salesman.” Treas. Reg. 31.3121(d)‐

1(d)(3)(ii). Specifically, “[a]n individual who entire or principal business activity is devoted to the solicitation of life

insurance or annuity contracts, or both, primarily for one life insurance company is a full‐time life insurance

salesman.”  

A different section of the Code allows companies to provide select employee benefits to “full‐time life insurance

salesmen” as defined for purposes of FICA. 26 U.S.C. 7701(a)(20). Specifically, companies may treat full‐time life

insurance salesmen as employees for purposes of group term life insurance, medical and other health benefits,

qualified retirement plans.  
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COMMENTS AND REQUESTS ON PROHIBITED TRANSACTION EXEMPTION 84‐24

1. Applicability of Prohibited Transaction Exemption 84‐24 (“PTE 84‐24”) to Variable

Annuities

Section I(a)(1)‐(6) of PTE 84‐24 identifies what transactions can be covered under PTE 84‐24 and

Section I(b) imposes limitations regarding the use of PTE 84‐24 relative to IRAs.31 Section I(b)

provides: “Scope of these Exemptions. The exemptions set forth in Section I(a) do not apply to

the purchase by an Individual Retirement Account as defined in Section VI, of (1) a variable

annuity contract or other annuity contract that is a security under federal securities laws, or (2)

mutual fund shares.”32

We ask the Department to reconsider the current distinction between fixed and variable

annuities under the amended PTE 84‐24, and revise it to cover the sale of all annuity contracts

to IRAs.

To summarize, the rationale, provided in the Preamble,33 for not permitting the sale of a variable

annuity in an IRA to be covered under PTE 84‐24 seems to be based on the following criteria:

• The Department believes that insurance products and security products warrant different

treatment;

• The Department believes that security products require that investors have protections that

are provided under the Best Interest Contract Exemption and are not provided under PTE 84‐

24; and

• The Department believes that variable annuities should be treated as a security product.

The Department’s assessment that variable annuities should be treated as a security product

ignores certain critical risk characteristics of variable annuity contracts that align these contracts

more closely with insurance products than securities products.  We believe the Department’s

failure to include variable annuity contracts under the amended PTE 84‐24 is unwarranted and

does not contribute to investor protections.  Whether an annuity contract is fixed or variable, the

insurance company still bears the risk of the investor outliving capital.  Given that, in practice,

both fixed and variable annuity contracts require the company to bear longevity risk, these

arrangements are far more similar to each other than to securities investments in any regard.

An annuity contract does not convert from an insurance product to a securities product with the

addition of a variable investment feature.  Variable annuity contracts are not simply securities

products; they are first insurance contracts.  A variable annuity combines traditional insurance

concepts with certain mutual fund principles to solve two increasingly important problems in

retirement planning – increased life expectancy and inflation.  Variable annuity contracts share

                                                            

31 Fiduciary Rule Notice, 80 Fed. Reg. 22018. 32 Id.   33 Fiduciary Rule Notice, 80 Fed. Reg. 22014, 22015.
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many of the features of a fixed annuity contract, including a fixed (general account) option with

interest guarantees, mortality‐based investment guarantees, retirement income guarantees, and

the availability of additional life‐contingent withdrawal options.  These features are not available

in a securities investment.  Also unlike an investment in securities, both fixed and variable

annuities provide for the liquidation of principal and income actuarially over a lifetime, with the

insurance company assuming the risk of miscalculating mortality predictions in computing

benefit payments.

2. Harmonize Consent Requirement for Annuities and Mutual Funds

The basic conditions required to satisfy PTE 84‐24 are different for annuities and mutual funds.  

Sections IV(b)(1) (for annuities) and IV(c)(1) (for mutual funds) of PTE 84‐24 both require that

prior to the execution of the transaction, a disclosure must be provided to the plan fiduciary.  

The required disclosure for annuities and mutual funds is virtually identical, but the post‐

disclosure requirements differ significantly.

We ask the Department to allow the “negative consent” approach that is currently available to

mutual fund transactions to be available for annuity transactions.

We believe that there are disparate post‐disclosure requirements between the sales of annuities

and mutual funds, and that this asymmetry gives mutual funds a competitive advantage over

annuities.  For an annuity transaction, after providing the disclosure, the plan fiduciary must (i)

acknowledge, in writing, receipt of the disclosure, and (ii) approve the transaction before the

transaction can be executed.34  Mutual fund transactions, on the other hand, are able to utilize a

“negative consent” approach to obtaining approval: after providing the disclosure, the

transaction can be executed without having to wait to get anything back from the plan fiduciary ‐ 

unless facts or circumstances indicate otherwise, approval by the plan fiduciary may be

presumed if the fiduciary allows the transaction to proceed after receiving the disclosure.35  The

Preamble to the Proposed Amendment to and Proposed Partial Revocation of PTE 84‐24

discusses Disclosures and Consent Forms36 but does not provide any explanation or rationale for

the disparate requirements.   

                                                            

34 The Preamble provides “In order to receive commissions in conjunction with the purchase of insurance or annuity

contracts, section IV(b) of PTE 84–24 as amended requires the insurance agent or broker or pension consultant to

obtain advance written authorization from a plan fiduciary or IRA holder independent of the insurance company

(the independent fiduciary) following certain disclosures...” (emphasis added). 35 The Preamble provides “In order to receive commissions in conjunction with the purchase of securities issued by

an investment company, section IV(c) of PTE 84–24 as amended requires the investment company Principal

Underwriter to obtain approval from an independent plan fiduciary following certain disclosures...Unless facts or

circumstances would indicate the contrary, the approval required under section IV(c) may be presumed if the

independent plan fiduciary permits the transaction to proceed after receipt of the written disclosure” (emphasis

added).

36 Fiduciary Rule Notice, 80 Fed. Reg. 22016.  
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3. Clarify Rollovers and Conversions are covered by the Proposed Amended PTE 84‐24

Section I of the Proposed Amended Exemption 84‐24 describes covered transactions.  It is

unclear if all of the component parts of a rollover recommendation would be covered under PTE

84‐24.  Similarly, when dealing with IRA conversions, it is also not clear whether PTE 84‐24 would

cover all of the component parts of a conversion recommendation.   

We ask the Department to clarify that all parts of the rollover and conversion process are

covered under the Proposed Amended Exemption 84‐24.

As the availability of guaranteed retirement income through employer‐sponsored plans has

declined, individuals have turned to individual annuity products through the IRA rollover market

to secure a source of guaranteed income past retirement.  A broad selection of annuity products

are available, including relatively simple single premium deferred annuities.  Consumers benefit

from being able to use the rollover process to access these types of retirement

products.  Because, as the Preamble points out, individuals are becoming increasingly

responsible for managing their investments, and because defined benefit pensions are

increasingly unavailable to employees, Thrivent believes that now, more than ever, it’s important

for consumers to have the ability to have guidance and help through the entire rollover and

conversion process.  Clarifying that PTE 84‐24 covers the entire rollover and conversion process

will help preserve this ability for consumers. 

PERIOD BETWEEN EFFECTIVE DATE AND APPLICABLE DATE

Since the availability of the exemptions is dependent upon the applicability date of the final

regulation, we ask that the final regulation’s eight month time‐frame be extended to a more

reasonable 24 to 36 month time‐frame.   

The Proposal makes the Best Interest Contract Exemption and PTE 84‐24 available at the same

time the final regulation becomes applicable (eight months following the publication of the final

regulation in the Federal Register).  We are primarily concerned about an eight month time

period from the date of publication to satisfy all of the requirements (such as the data collection

requirements) of the Best Interest Contract Exemption and PTE 84‐24.37  We believe having

between 24 and 36 months to comply with the regulation will allow us a reasonable time frame

in which to coordinate with intermediaries and design, test and implement necessary

technological and other structural changes.

We believe the Department has significantly underestimated the amount of time – and the cost

thereof – that will be required to fully comply with the Proposal, particularly within eight months

of the final regulation being published.  In fact, the Department acknowledged in the Preamble

                                                            

37 Fiduciary Rule Notice, 80 Fed. Reg. 21950.  
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that “compliance with certain requirements of the new exemption may be difficult within the

eight‐month timeframe.”38   

Moreover, it is unclear how investment advice that is provided during the period between the

effective date (60 days after publication) and the applicable date (eight months after publication)

will be treated.  We ask the Department to provide specific guidance as to the status of

investment advice provided during that time frame.  

CONCLUSION

We commend the Department for its efforts to ensure consumers are appropriately protected as

they consider making financial decisions.  As a fraternal benefit society owned by our members,

Thrivent Financial for Lutherans has been focused on serving members in a pro‐consumer, fair,

and transparent way since its origin – that’s part of being a membership organization.  Thrivent

has actively supported a best interest standard of care for the sale of financial products for years.  

In fact, in 2009, Thrivent testified before the House Financial Services Committee in support of

such a standard.39  Unfortunately, the practical application of the Proposal as currently drafted

will not allow us to achieve that goal, and instead will increase costs to our members, reduce

access to financial advice primarily for middle and lower income families, and potentially force us

to stop serving a large portion of our members of modest means as well as prohibit us from

fulfilling our mission of service in communities.   

In its justification for the Proposal, the Department asserts that current regulatory protections

are inadequate to address its concerns about advice to retirement plan participants.  We

respectfully disagree with that blanket assertion, as we at Thrivent have been successfully

serving our members, mostly individuals and families of modest means, in their best interest for

more than a century.  A broad array of regulation and detailed systems of retirement investor

protections is already in place and working, administered by the Department, the Internal

Revenue Service, the Securities and Exchange Commission, the Financial Industry Regulatory

Authority, state insurance departments and state securities departments.

The Proposal seems to be founded on a premise that commissioned proprietary products

influence advisers to provide conflicted advice to the detriment of retirement investors.  

Therefore, the Proposal elevates automated robo‐advice and fee‐based advice as preferable

alternatives because they are cheaper or better aligned with the interests of retirement

investors.  This assumption is often incorrect.  Recommendations under the Proposal may

                                                            

38 Fiduciary Rule Notice, 80 Fed. Reg. 21950.   39 On behalf of the American Council of Life Insurers, Bruce Maisel from Thrivent testified at the October 6, 2009

hearing entitled: CAPITAL MARKETS REGULATORY REFORM: STRENGTHENING INVESTOR PROTECTION, ENHANCING

OVERSIGHT OF PRIVATE POOLS OF CAPITAL, CREATING A NATIONAL INSURANCE OFFICE
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Page 23

generate the least expensive product, but the least expensive product may not be in the

investor’s best interest.

As a fraternal benefit society, Thrivent is particularly concerned that the Proposal will stifle the

ability of Thrivent’s members to engage in religious and benevolent activities through the lodge

system that benefit their communities and society as a whole.  We urge you, therefore, to take

Thrivent’s unique nature, member governance and our requests into account and modify the

Proposal into a workable rule that will protect retirement investors while still leaving them

access to meaningful education and advice as well as access to financial products and services,

the purchase of which would not only be in their best interest, but will also continue to allow

Thrivent and our members to make a significant positive impact in U.S. communities.   

Respectfully submitted,

Teresa J. Rasmussen

Senior Vice President, Secretary and General Counsel  

612‐844‐5183

Terry.rasmussen@thrivent.com

cc: Ms. Judith Mares (mares.judith@dol.gov)

Mr. Fred Wong (ORI@dol.gov)

Ms. Karen Lloyd (Lloyd.karen@dol.gov)

Mr. G. Christopher Cosby (cosby.chris@dol.gov)

Mr. Howard Shelanski (HShelanski@omb.eop.gov)