Congressional Hearing Confirms DOL Proposal to Make Appraisers of ESOP Stock is Not to Stop “Rogue,” “Fly by Night,” Unqualified Appraisers, but Mainstream ESOP Appraisers, One of Whom Probably Appraises Your ESOP Stock!

by The ESOP Association | Jul 26, 2011

On July 26, Assistant Secretary Phyllis Borzi, head of the Department of Labor’s Employee Security Benefits Administration (EBSA), during testimony to the Subcommittee on Health, Employment, Labor, and Pensions of the House Education and Workforce Committee confirmed what The ESOP Association has said from the day the proposed regulation was published:

DOL’s proposal to mandate all appraisers of private ESOP company’s shares are ERISA fiduciaries is NOT just to police rogue, fly by night, unqualified persons performing ESOP appraisals.

During her testimony, in response to a question, Secretary Borzi made clear that she and her agency had found that prominent ESOP appraisers are often using “wrong methodologies” when appraising ESOP stock.

MESSAGE:  If the DOL proposal mandating that all ESOP private company appraisers be ERISA fiduciaries as proposed, not only will your company pay more for an appraisal, the chances are high that a DOL audit will deem your ESOP share value to be a violation of ERISA, or such a claim will be made by plaintiff lawyers.

The ESOP community must continue its protests to members of Congress about this DOL proposed regulation.

If your Representative or Senators have already protested, thank her or him again; and ask if they have heard anything from DOL indicating a willingness to alter the proposed regulation.  If Senators, ask that they consider cosponsoring the Ayotte et al bill, S. 1232, stopping the DOL regulation in its tracks.

If you have no evidence that your Representative or Senators have contacted the DOL, and you have contacted their offices already, call and ask if you can expect a response.  [Dial 202.224.3121, and ask the operator to connect you to the member’s office.]

If you have not yet contacted your Representative or Senators, please considering doing so.  Click here for suggested letter that can also be used as a phone script.

Remember: it is your ESOP in the line of fire. Not some weird ESOP outlier company!!!