The Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) has not yet released a new version of its proposed regulation on the definition of a fiduciary but officials at the EBSA are still focused on ESOPs. (See the June 25, 2012 blog post on reaction of U.S. Senator to indications DOL will not be altering its proposal to mandate all ESOP appraisers be ERISA fiduciaries.) According to an article in the June 12, 2012 edition of the Daily Tax Report, Assistant Secretary of Labor for EBSA, Phyllis C. Borzi, said the EBSA will be focusing on enforcement projects having to do with employee benefit plan contributions in the coming months.
There are several national enforcement projects EBSA will focus on in 2012, concerning ESOPs specifically though, the article states the following: “The Employee Stock Ownership Plans Project, which identifies and corrects violations of ERISA in connection with ESOPs, such as incorrect valuation of employer securities and refinancing of ESOP loans.”
“The fact that Ms. Borzi is naming ESOPs specifically in the list of enforcement projects for 2012 illustrates that there are dark clouds over ESOPs at DOL and its proposal to make all ESOP appraisers ERISA fiduciaries,” said ESOP Association President J. Michael Keeling.