The Department of Labor Seeks Comments on Proposed Regulation on the Definition of Adequate Consideration

In lieu of mandating that appraisers of private company stock held, or stock held by an ESOP, be ERISA fiduciaries, the Department of Labor is seriously considering reissuing the May 17, 1988, proposed “Adequate Consideration” regulation. In turn, a senior official of the Department has asked that The ESOP Association provide its thinking as to what a re-proposed Adequate Consideration regulation should provide in terms of ensuring ESOP appraisals be in accord with the laws governing private company ESOP appraisals.

The Association’s Washington office committed to the Department to honor its request for input. Thus, the Association’s Advisory Committee on Legislative and Regulatory Issues, and its Advisory Committee on Valuation, are developing a response for the Association to the Department’s request.

Discussion about content of the proposed 1988 Adequate Consideration regulation were a focus of the recent Professional Forum held in New Orleans in February 2015.

A copy of the proposed 1988 regulation is available on the Association’s website on the Legislative and Regulatory Issues Committee’s page. You will need to login to access the file. Once logged in:

Go to -> About the Association

On left side menu click -> Advisory Committees

Then -> Legislative & Regulatory

It’s posted under the section titled ESOP Regulations Needed Guidance

In 1988, The ESOP Association included information in the ESOP Report on this proposed regulation. To read that story, ESOP Report Adequate Consideration Article Feb 1988.

One thought on “The Department of Labor Seeks Comments on Proposed Regulation on the Definition of Adequate Consideration

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s