The ESOP Association Submits Comments to the Department of Labor

WASHINGTON, Feb. 1, 2011 /PRNewswire-USNewswire/ -- The ESOP Association submitted comments to the Department of Labor's Employee Benefits Security Administration (DOL EBSA) regarding the proposed regulation, "Definition of the Term Fiduciary."  

Noting that many privately-held businesses would be directly impacted by the proposed regulation which would make valuators of ESOP stock fiduciaries of the ESOP trust, the Association stated five reasons that should be considered in the EBSA's deliberations of the proposed regulation: 1.) mandating any and all valuators of private company stock be fiduciaries will increase the cost of the valuation substantially; 2.) establishing more efficient, less economically burdensome ways to ensure valuations are done properly without reducing ESOP companies' profits is doable; 3.) creating potential lack of trustee prudent actions if the valuator services provider has an equal fiduciary role as a trustee; 4.) confusing the law on trustee decisions; and 5.) creating a big cost for ESOP companies arising from more private parties suing ESOP companies and their trustees in cases that Federal courts currently dismiss.

"Nearly 91% of corporate members of The ESOP Association are small businesses that have fewer than 500 employees that are not traded on the public stock market.  These ESOP companies have pride in their ownership structures and we feel these proposed changes are not in the best interest of average pay employees," said ESOP Association President J. Michael Keeling.  "This proposed regulation will weaken companies providing local jobs, companies that are overwhelmingly furnishing average pay employees with significant retirement savings.  We believe the DOL is mistakenly seeking the perfect at the expense of the good."

The ESOP Association is the national trade association for companies with employee stock ownership plans (ESOPs) and the leading voice in America for employee ownership.  The core cause of The ESOP Association is the belief that employee ownership will improve American competitiveness, increase productivity through greater employee participation, and strengthen our free enterprise economy.

SOURCE The ESOP Association

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