ESOP Appraisers Unaffected by New Fiduciary Regulations
Author: Cara Benningfield
On March 18, 2015, the U.S. House Education and the Workforce Committee met to review President Obama’s fiscal year 2016 budget proposal for the U.S. Department of Labor (DOL)—and the discussion in that meeting could spell good news for employee stock ownership plans (ESOPs).
At the meeting, DOL Secretary Thomas Perez spoke with Congressman Brett Guthrie (R - Ky.) about proposed fiduciary regulation. In October 2010, the DOL issued proposed regulation that would have made ESOP appraisers fiduciaries. This provision received significant attention within the ESOP community, raising concerns about its potentially negative impact on ESOPs. However, in the committee meeting, Perez indicated the new proposed regulation wouldn’t include this provision—news that’s been received favorably within the ESOP community.
Guthrie thanked Perez for taking time to understand the benefits ESOPs create for employees and communities, while Perez indicated Democrats and Republicans have a “shared interest in creating an economy that works for everyone.” He said ESOPs can help create a sense of “shared prosperity” for employees and business owners. These positive developments and comments are encouraging and hopefully will lead to policies that further promote ESOPs.
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