ESOP Appraisal Compliance Questions Highlight Agency Gray Areas

A longstanding vehicle for worker company ownership among retirement savers presents a wide range of compliance concerns for participants and employers, while federal agencies have let questions linger on how to properly appraise shares.

Recent litigation alleging the IRS “secretly” promulgated a “rule” that adds hurdles to the compliance process for employee stock ownership plans underscores a need for clear agency guidance, which both the IRS and Labor Department have stated is a priority, but haven’t yet addressed by issuing final rulemaking.

The DOL’s Employee Benefit Security Administration listed “worker ownership, readiness, and knowledge” on its spring 2024 regulatory ...