Back in 2010, the Department of Labor (DOL) proposed regulations with a significant change to the definition of term “fiduciary” with regard to employee benefit plans. This change would have given appraisers the duties of plan fiduciaries when performing ESOP valuations. It is imperative for appraisers to remain independent and unbiased. As fiduciaries under the proposed regulations, appraisers would be placed in a tenuous position since they would have owed a special duty of care to one specific party in an ESOP transaction.
As stated in the American Society of Appraisers’ (ASA) Capital Action newsletter, this rule will be dropped:
“ASA has learned that when the Department of Labor (DOL) reproposes a broad set of rules affecting fiduciaries and prohibited transactions, that the reproposal will not include a proposal to classify appraisers as fiduciaries in connection with valuations of employee stock ownership plans (ESOPs).”
“ASA, working in conjunction with a group of leading valuation firms, worked tirelessly for over three years to encourage DOL to abandon the “appraiser-as-fiduciary” rule, and provided constructive alternatives to the proposal. We would like to thank Donna Walker, FASA, and Jeffrey Tarbell, ASA, for their contributions to this effort, and the Groom Law Group for their contributions as well.”
We at Columbia Financial Advisors, Inc. are proud to have contributed to this effort and excited to learn the outcome!