The American Institute of CPAs (AICPA) Seeks Support for S. 1232

S. 1232, introduced by Senator Kelly Ayotte (R-NH) in June 2011, is a bill to modify the definition of fiduciary under the Employee Retirement Income Security Act of 1974 to exclude appraisers of employee stock ownership plans. This bill is a response to the Department of Labor’s (DOL) proposed anti-ESOP regulation mandating all private ESOP company appraisers be ERISA fiduciaries.  If the proposed regulation were to be finalized as is, there would be extreme confusion over whether the appraiser or the trustee[s] and other current fiduciaries make the decisions about acquisition of shares, and most troubling, would leave private ESOP companies open to lawsuits. More information can be found here.

On August, 9, 2012, the President and CEO of AICPA, Barry C. Melancan, CPA, CGMA, wrote to Senators Tom Harkin and Mike Enzi to ask for their support of S. 1232. Senator Harkin is Chair of the Senate Committee on Health, Education, Labor and Pensions and Senator Enzi a Ranking Member. The letter states:

“…the DOL’s 2010 proposed definition of fiduciary, which would contradict more than 35 years of accepted practice, will not solve the agency’s quality concerns regarding a limited number of ESOP appraisals. Rather, it takes a one-size-fits-all approach to correct an admittedly small potential problem which would benefit from a far more specific solution.”

“We have said it over and over again, but the DOL does not want to listen. The officials at DOL need to wake up to the fact that private company ESOPs have tremendous positive records of creating jobs that are locally controlled in high performing companies.  ESOPs are good for employees, companies, and our communities,” said ESOP Association President J. Michael Keeling. “While a new version of the regulation has not been proposed yet in 2012, the DOL continues to state that ESOPs will be closely examined and incorrect valuations are of particular concern. DOL officials refuse to listen and we have heard they have no intent to alter their views toward ESOPs. We thank the AICPA for their support of S. 1232 and ask members of The ESOP Association to reach out to their Senators and ask for their support of this bill.”

2 thoughts on “The American Institute of CPAs (AICPA) Seeks Support for S. 1232

  1. This bill appears to be currently residing at the Committee. I am from Iowa and one of my senators is the Chair of the Committee on Health, Education, Labor and Pensions. What can I do to help bring more awareness of this to him?

    • We welcome your contacting both of your Senators, Mr. Grassley and Mr. Harkin, by letter followed up with a telephone call in 5 to 10 working days to ask to speak to the staff aide who may have received the letter. May we especially point out the important role Senator Harkin has with regard to the Department of Labor (DOL). One, he is Chair of the U.S. Senate Committee on Health, Education, Labor and Pensions, which has primary jurisdiction over all DOL programs including the Employee Benefits Security Administration (EBSA) which issued the objectionable proposed regulation. Also, he Chairs the Senate Appropriations Committee on Labor, Health and Human Services, and Education which reviews and approves spending by the DOL. His role makes him first among equals in the eyes of the DOL.

      Finally, we do appreciate what the AICPA has done. It is the largest organization in the history of ESOPs to stand with The ESOP Association on a government advocacy effort.

      Thank you for reaching out to your Senators on this issue.

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