DOL ESOP Fiduciary Regulations Will Be Limited to Transactions

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The February 15, 2012 Employee Ownership Update is online and discusses the following:  

• DOL Works on Re-Proposal

• White House Budget and ESOPs

• Stanford Webinar on Exporting Ownership Culture to China

• Reaction to Iowa Governor's ESOP Initiative

The Update provides an update on the DOL Re-Proposal of the DOL Regulation to Change the Definition of Fiduciary, stating that the DOL will focus on appraisals used in transactions and will be limited to "arm's-length commercial transactions."

Louis Campagna of the Department of Labor's Employee Benefits Security Administration said on February 2 that when it re-proposes its regulation on plan fiduciaries it will focus on appraisals that are used in transactions. The DOL's original proposal would have made the appraisers of ESOP shares plan fiduciaries, but the department withdrew that proposal in September 2011. Campagna noted that the new proposed regulations will be limited to "arm's-length commercial transactions."

It also discusses how the recent White House Budget addresses the Taxation of ESOP Qualified Replacement Property (QRP) After Divorce and reaction to the Iowa ESOP Initiative to encourage Selling to an ESOP.