Senator Ayotte Continues Efforts to Cut Federal Red Tape

Press Release

Continuing her efforts to reduce burdensome federal regulations on New Hampshire's small businesses, Senator Ayotte today introduced legislation that would protect employee stock ownership plans (ESOPs) from a costly new regulation proposed by the Department of Labor (DOL). If implemented, DOL's rule would expand the definition of "fiduciary" under the Employee Retirement Income Security Act to include appraisers of all private ESOPs.

The proposed rule would result in new compliance and regulatory costs for private companies offering ESOPs (nearly all of which are small businesses) and could jeopardize the availability of these plans in the future. It also would force appraisers to purchase expensive fiduciary insurance, employ specialized counsel, and could expose private ESOP companies to frivolous litigation.

Senator Ayotte's legislation would reverse DOL's rule by explicitly exempting ESOP appraisals from the law's stringent fiduciary requirements.

ESOP Association President, J. Michael Keeling, said, "We're very pleased to see Senator Ayotte take the lead on this issue. The DOL needs to wake up to the fact that private company ESOPs have tremendous positive records of creating jobs that are locally controlled in high performing companies. ESOPs are good for employees, companies, and our communities."

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