January 2015 Monthly Wrap-up

As it turns out, January was a busy month…

We noted some upcoming events for February

We reported that the Department of Labor will not mandate ESOP appraisers be ERISA fiduciaries

The ESOP Association filed an amicus in Supreme Court case Tibble V. Edison Int’l

ESOP Association members were named Great Places to Work!

The January 2015 ESOP Report was published

We shared a guest post from AACE Awards Volunteer Coordinator, Paul Horn – 2015 AACE Awards

We highlighted a new report from the Center for American Progress that discusses inclusive prosperity

2015 conference sponsorship were announced

We mentioned a few ways to keep up with Association updates

2015 AACE Awards category information was shared

The Two Day Professional ESOP Forum was announced

The ESOP Administration Handbook was highlighted

ESOP Experts 2015 – If you’re interested, more info here

2015 AACE Awards — we told you what you need to know to enter this year

Reports are the Department of Labor Will Not Mandate ESOP Appraisers be ERISA Fiduciaries

On Monday, January 26, 2015, ESOP Association President, J. Michael Keeling, received a call from a senior official at the Department of Labor (DOL) regarding the proposed fiduciary rule noting it will not mandate that appraisers of private ESOP company stock be ERISA fiduciaries. (The rule was originally proposed in 2010.)

It’s generally known among DC groups that are following the DOL’s proposed fiduciary rule that the portion of the rule directed toward ESOPs will not be included in the re-proposed fiduciary proposal from 2010.

It should be noted, however, that the DOL will be looking for clarity and guidance on ESOP appraisals that are in accord with ERISA rules for private ESOP stock to be valued at fair market value, as defined by a ‘willing buyer/willing seller’ construct.

It should also be noted that while the above information on the re-proposal is now widely known, no specific proposed rule has been published yet. When published, we will let ESOP Association members know.

News: Justice Department Asks Supreme Court to Reverse Circuit Courts’ Pro-ESOP Position

ESOP Association News

The ESOP Association sent out the following press release. We are sharing with readers here.

For Immediate Release: November 14, 2013

Justice Department Asks Supreme Court to Reverse Circuit Courts’ Pro-ESOP Position

November 14, 2013 (Washington, DC) – In a disappointing turn of events, the Obama Administration has once again taken a negative position in regard to employee stock ownership plans (ESOPs).

Early in 2013, the Supreme Court asked the Solicitor General to comment on technical questions regarding stock-drop cases and to assess whether these types of cases should be brought to the attention of the Court. In a rather strange move, the Solicitor General asked the Court to focus only on a matter concerning ESOP plan fiduciaries, and whether they are entitled to the presumption that they have acted in the best interests of plan participants by investing in company stock.

“Congress, and former Presidents, has consistently encouraged ESOPs for over 30 years,” said ESOP Association President, J. Michael Keeling. “The presumption that ESOP plan fiduciaries act prudently when company stock is the ESOP’s primary asset was decided by the Third Circuit in Moench V. Robertson,  a 1995 case that plaintiffs won, making it clear bad actors do not prevail but also acknowledging Congress has endorsed ESOPs and Presidents have signed pro-ESOP laws. This pro-ESOP Moench position has been upheld by a majority of Federal courts for years, and one can only presume from the Solicitor General’s question of Moench that the Justice Department is looking to harm ESOPs.”

There is concern that if the Supreme Court agrees with the Administration, there will be a rise in lawsuits challenging ESOP companies. Numerous anti-ESOP lawsuits would do harm to ESOP companies and their employee owners.

“Since 2010, the ESOP community has been fighting a proposed regulation from the Department of Labor regarding the definition of an ESOP fiduciary. The Solicitor General’s attack on ESOPs is one more dig from an Administration that has demonstrated negative views of employee ownership as evidenced by its budget proposal justifying the reversal of a pro-ESOP tax law because, according to the Administration, employees working for companies with more than 10 – 15 employees are incapable of understanding how their actions impact their company. It’s counter-intuitive to hear the Administration preach about creating jobs and then try to take away a proven policy that sustains jobs,” stated Mr. Keeling.

For those that are curious, the Justice Department Brief: Brief


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. More information: website – www.esopassociation.org and blog – www.esopassociationblog.org.

September 2013, Update on the DOL

ESOP Association President, J. Michael Keeling, provides members with an update on the Department of Labor’s proposed regulation on the definition of fiduciary.

For those interested, the letter from Congressman Rokita and Congressman Loebsack to the DOL that Mr. Keeling refers to in the video update is here: Letter to DOL September2013.

August 2013 Round Up of Links

It’s the last day of the month before a holiday which means it’s time for a link up of this month’s stories. See below for your refresher.

Joining us in Vegas? Here’s what you need to know about the Conference.

The 2013 Press & Event Planning Kit for Employee Ownership Month has been released. Download your copy today.

The August 2013 ESOP Report is available on the Association’s website.

The Outside Board Registry is a great resource for members.

We tell you how to keep up with tax reform updates.

Publications highlight: ESOP Fiduciary Handbook.

A new special education track for in-house ESOP trustees will be offered to attendees of the Las Vegas Conference & Trade Show.

Watch the tax reform update for August.

Senators send letter to new DOL Secretary regarding proposed rule on the definition of a fiduciary.

Senators Send Letter to New DOL Secretary Regarding Proposed Rule on the Definition of a Fiduciary

On July 25, 2013, Senators Mitch McConnell (R-KY), John Thune (R-SD), Kelly Ayotte (R-NH), and Roy Blunt (R-MO), sent a letter to the just confirmed new Labor Secretary, Thomas Perez, about the Department’s proposed regulation that would mandate all private ESOP company appraisers be ERISA fiduciaries.

In the letter, the Senators state:  “We cannot overstate the detrimental effect the 2010 proposed regulation would have on private ESOP companies that have a successful record of maintaining much needed jobs and providing generous retirement benefits for part-time, low-wage, and middle class workers. The Labor Department’s efforts to expand the definition of fiduciary to include independent ESOP appraisers will only hurt the very employees it seeks to protect.”

“We thank Senators McConnell, Thune, Ayotte, and Blunt for their strong support of ESOPs and for taking this step in emphasizing to the DOL just how harmful this proposed regulation is to the ESOP community,” said ESOP Association President, J. Michael Keeling. “These Senators are major leaders in the U.S. Senate — Senator McConnell, the Republican Leader; Senator Thune, Chair of the Senate Republican Conference; and Senator Blunt, Vice Chair of the Senate Republican Conference. And of course, Senator Ayotte, who first took up the ESOP cause protesting the DOL proposal, has now become a national figure in American politics.”

Click here to read the full letter – Letter to DOL.

July 2013 Re-Cap

It’s the 31st of July which means it’s time for the monthly link up.

Tax Reform Update from July 3rd – Senate Opens Process to Decide What Tax Benefits to Keep

Senator Kelly Ayotte Seeks Cosponsors for S. 273

Help Save ESOP Tax Law

ESOP Association member, C.S. Davidson, Inc. Honored with Well Workplace Award through the Lancaster County Business Group on Health

Center for American Progress Report Cites Need for More Inclusive Capitalism

ESOP Association President Participates in Senate Small Business Committee Tax Roundtable

July 2013 ESOP Report was released

AICPA Supports Bills to Block Change in DOL Fiduciary Rule for Appraisers of ESOPs

The ESOP Association Announced a New Issue Brief from the Advisory Committee on Valuation — White Paper on Valuing Synthetic Equity

Once Again: Save ESOPs

A reminder about the upcoming 2013 Employee Owner Retreat

Coalition to Protect Retirement Sends Letter to Senate Regarding Tax Reform; Retirement Savings Network Also Sends Letter

ESOP Association Member, Carl Warren & Company, Honored as 2013 ESOP Company of the Year