The DOL Fiduciary Process Agreement for ESOP Transactions

Chicago partner Theodore Becker, counsel Julie Govreau, and Washington D.C. counsel Bradford Campbell published an issue brief with the National Center for Employee Ownership (NCEO), entitled “The DOL Fiduciary Process Agreement for ESOP Transactions.”

Publication Overview

From 2012 to 2014, GreatBanc Trust Company and the Department of Labor (DOL) negotiated an "Agreement Concerning Fiduciary Engagements and Process Requirements" that provides guidance for future ESOP transactions. Although the agreement formally applies only to GreatBanc, the DOL has stated that others would "do well to take notice of" the agreement's provisions. The agreement can be viewed as a "playbook" that, if followed, could serve as evidence that the trustee fulfilled its fiduciary duty by engaging in a prudent process in connection with an ESOP transaction.

Ted, Julie and Brad co-authored this issue brief, and were all involved in negotiating the GreatBanc agreement. The NCEO publication assists readers in interpreting the agreement by putting its provisions in context. For each section of the agreement, the authors quote the agreement's language; point, where appropriate, to preexisting guidance containing policies and procedures embodied in the agreement; and provide commentary, based on their involvement in negotiating the agreement with the DOL, on how its provisions are intended to operate. Appendices provide a convenient checklist for implementing the agreement as well as the full text of the agreement itself.

Print and digital editions of the 26-page publication are available through the NCEO website. Obtain the issue brief, as well as a content outline and excerpt, here.