AICPA Urges Congress to Prevent Labor Department from Expanding the Definition of a Fiduciary

October 17, 2013

Earlier this year, much-needed legislation was introduced in the U.S. House of Representatives and Senate that would prevent the Department of Labor (DOL) from changing the long-standing definition of fiduciary under the Employee Retirement Income Security Act of 1974 (ERISA) to include appraisers of employee stock ownership plans (ESOPs). 

The American Institute of CPAs (AICPA) sent a letter to Congress urging legislators to cosponsor this legislation, S. 273/H.R. 2041, and encouraged members of the Forensic and Valuation Services Section to write their members of Congress and encourage their clients to do so as well.  Without enactment of this measure, the AICPA is concerned that the DOL’s pending re-issuance of its 2010 rule proposal will again seek to impose a fiduciary duty on independent appraisers of Employee Stock Ownership Plans. 

The AICPA has repeatedly advocated that, rather than treating appraisers of ESOPs as fiduciaries, as was previously proposed by the DOL, rules should be implemented to ensure that only qualified individuals prepare valuations for benefit plans and that such individuals follow recognized valuation standards.  If the DOL proposal is adopted, it could result in new compliance costs for the nation's approximately 11,000 ESOPs, which would result in lower share values and reduced retirement savings for employees. 

To learn more about the DOL’s fiduciary re-proposal and its impact on CPAs, watch this video featuring AICPA’s Senior Vice President for Congressional and Political Affairs Mark Peterson and visit the ERISA Fiduciary Definition page on the AICPA website.  Resources, including sample letters and talking points, are available on this page, if you wish to contact your member of Congress to ask him or her to cosponsor S. 273/H.R. 2041.