Department of Labor to Re-Propose Fiduciary Regulation

Acknowledging the feedback it had received from Congress and ESOP companies, the Department of Labor (DOL) announced that it would not adopt a proposed regulation that would have made appraisers of ESOP shares plan fiduciaries. Instead, the DOL will re-propose the rule after additional input. "We will take the time to get this right to ensure that we provide the strongest possible protections to business owners and retirement savers in plans and IRAs," said Phyllis C. Borzi, the Assistant Secretary of Labor for the Employee Benefits Security Administration (EBSA). The decision is also in response to President Obama's executive order 13563, which directs agencies to avoid regulations that impose burdens on business. The ESOP Association describes the announcement as a positive development but warns that the "game is not over," noting that the DOL's press release leaves the possibility that appraisers would be considered fiduciaries when they value stock in connection with a transaction.