Chicago partner Ted Becker was noted in the January 2015 edition of the FVS Consulting Digest, a quarterly publication released by the American Institute of Certified Public Accountants (AICPA). The article is titled “Department of Labor Fiduciary Process Agreement,” and discusses issues related to the Department of Labor (DOL) Fiduciary Process Agreement for ESOP Transactions that are applicable to valuation professionals and to fiduciary responsibilities of the ESOP trustee.
In June 2014, the United States Department of Labor (DOL), in collaboration with GreatBanc Trust Company, released a negotiated agreement that is commonly referred to as the DOL Fiduciary Process Agreement for ESOP Transactions. The agreement was appended as “Attachment A” to the settlement agreement in a lawsuit brought by the DOL against GreatBanc, Sierra Aluminum Company and The Sierra Aluminum Company Employee Stock Ownership Plan.
Ted worked with GreatBanc representatives to engage in constructive and collaborative discussions with DOL representatives over approximately 18 months. According to Ted, the agreement ultimately reached embodies essentially the same procedures that already were in use by GreatBanc as part of its prudent process. Ted further explains that the agreement applies only to GreatBanc; it is not a consent decree, injunction or court order; it is not binding precedent; not a law; and not a formally promulgated regulation or field assistance bulletin that governs the behavior of all fiduciaries.
The agreement, however, does represent one of the few written communications from the DOL regarding what is expected of fiduciaries in ESOP transactions, and is being closely studied by trustees, fiduciaries, appraisers, business owners and the wide spectrum of interested parties for its relevance to ESOP transactions.