Likely to Address Appraisal Issues in a Separate Rulemaking
RESTON, Va., April 7, 2016 /PRNewswire/ — As part of its release of a final rule tied to the imposition of "fiduciary" status to those persons who provide retirement investment advice, the Department of Labor announced in a guidance document that it is exempting all appraisals performed in connection with employee stock ownership plans, or ESOPs, from fiduciary treatment. In its proposed rule, DOL imposed fiduciary status on those valuing the assets of Employee Stock Ownership Plans (ESOPs) – a decision which violated the legal and ethical responsibility of professional appraisers to be independent of all parties to a transaction.
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This marks a complete success for ASA and the broader valuation community, who for over four years worked to convince the Labor Department and Congress that appraisals should be removed from the fiduciary rulemaking. In its original proposal, which was subsequently withdrawn because of overwhelming stakeholder opposition, DOL had proposed to require all those who performed appraisals in connection with ESOPs as fiduciaries, creating an untenable position for appraisers who must remain neutral but, as a fiduciary, would have owed a duty to plan participants. Included with fiduciary status would have been greater legal and risk exposure, possibly leading to penalties that could have proven devastating for the individuals and firms that complete these kinds of assignments.
ASA wishes to thank its Business Valuation leadership, and especially Donna Walker, FASA, and Jeffrey Tarbell, ASA, for their contributions in advocating against this proposal. ASA will continue to work with DOL ahead of its announced separate rulemaking on appraisal issues, and looks forward to a productive conversation moving forward.
American Society of Appraisers
The American Society of Appraisers is a world renowned and respected international organization devoted to the appraisal profession. As the oldest and only major appraisal organization representing all appraisal specialists, ASA is devoted to providing the highest possible standards in all areas of ethics, professionalism, education and designation criteria. For more information about the American Society of Appraisers, the ASA designation program for appraisers or the Society's free "Find an Appraiser" Referral System, visit www.appraisers.org or call (800) 272-8258.
Media Contact:
Todd Paradis
703-733-2124