AICPA Panel Opposes DOL’s Proposed Change to Definition of “Fiduciary”
The AICPA Forensic and Valuation Services Executive Committee (FVSEC) submitted a comment letter opposing a U.S. Department of Labor (DOL) proposal to change the definition of the term fiduciary. The FVSEC opposes the change because it would make virtually all valuations prepared for benefit plans, including employee stock ownership plans (ESOPs), fall under the fiduciary rules. The committee also said the change is:
- Incompatible with the Internal Revenue Service’s requirements for an independent appraisal of employer securities;
- Does not address the underlying issue of proper qualifications and standards for performing valuation services;
- Will increase the cost of valuation services for ESOP plans; and
- Will restrict the number of valuation specialists willing to do valuations for ESOP plans.
Because of these issues, the FVSEC said the DOL should not change the definition of fiduciary. Instead, the committee believes the DOL should implement rules to ensure only qualified individuals prepare valuations for benefit plans and that individuals follow recognized valuation standards.
The DOL will hold a hearing on the proposed change March 1 in Washington. Robert Reilly, CPA/ABV/CFF, is expected to speak at the hearing on the AICPA’s behalf.
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