Call your congressman about ESOP fiduciary legislation, says the AICPA

BVWireIssue #133-1
October 2, 2013

Valuation analysts may want to jump on the bandwagon and consider doing what the AICPA is urging its members to do—contact their representatives and senators and ask them to cosponsor legislation introduced in the House (H.R. 2041) and Senate (S. 273). This legislation 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.

Bad idea: Including appraisers as fiduciaries would force them to purchase expensive fiduciary insurance, employ specialized ERISA counsel, and expose CPAs to unwarranted litigation. “Moreover, any DOL proposal that treats appraisers as fiduciaries would create a conflict between a fiduciary’s strict duty of loyalty to plan participants and beneficiaries, and professional appraisal standards, which require an appraiser to perform assignments with impartiality, objectivity and independence,” says the AICPA in its appeal to members.

Learn more: The DOL proposal, along with other factors, has made pension and ESOP valuations a mine field 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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