New Bills Exempt Valuation Specialists from ESOP Fiduciary Status September 2013

The 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.”