New bills exempt valuation specialists from ESOP fiduciary status

BVWireIssue #129-1
June 5, 2013

Proposed legislation makes it clear that valuation professionals who appraise employee stock ownership plans (ESOPs) are not fiduciaries under ERISA.

A new bill in the House of Representatives (H.R. 2041) joins its companion in the Senate (S. 273) to modify the definition of fiduciary under ERISA to exclude appraisers of ESOPs. These bills come in the wake of a proposed regulation from the Department of Labor mandating that all private ESOP company appraisers be ERISA fiduciaries.

"A knowledgeable and experienced valuation professional has an important role to play in assisting ERISA plan decision-makers and related parties,” according to Dr. Susan Mangiero, CFA, certified Financial Risk Manager and an Accredited Investment Fiduciary Analyst. “Whether this regulation passes or not, it is in everyone's best interest to ensure that trained professionals are providing high-quality services. There is a lot of attention being paid to ERISA service provider due diligence these days and this focus is unlikely to go away anytime soon."

Mangiero, primary contributor to, has written an article on valuation with respect to employee benefit plans that will appear in the July 2013 issue of Business Valuation Update.

Please let us know if you have any comments about this article or enhancements you would like to see.