The AICPA has come out in support of legislation introduced in the House (H.R. 2041) and Senate (S. 273) that would prohibit the Department of Labor (DOL) from changing its definition of “fiduciary” under the Employee Retirement Income Security Act of 1974 (ERISA) to include appraisers of employee stock ownership plans (ESOPs). The legislation was proposed because the DOL’s pending reissuance of its 2010 proposal is likely to include a fiduciary duty for appraisers of employee benefit plans.
Wrong approach: The AICPA says that, instead of the DOL expanding the definition of “fiduciary,” rules should be implemented to ensure that only qualified individuals prepare valuations for benefit plans—and that they follow recognized valuation standards. That’s the approach other agencies have taken regarding the regulation of appraisers.
“The DOL proposal is a draconian response to a very small number of deficient ESOP appraisals,” writes AICPA president and CEO Barry C. Melancon in a letter to the relevant House and Senate committees.
Learn more: The DOL proposal, along with other factors, has made pension and ESOP valuations a minefield for appraisers. Listen to the recording of a recent BVR webinar, Valuation and ERISA Fiduciary Liability: Traps for the Unwary Appraiser.
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