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April 11,2011

Office of Regulations and Interpretations

Employee Benefits Security Administration

Attn: Definition of Fiduciary Proposed Rule

Room N-5655

U.S. Department of Labor

200 Constitution Avenue, N-W

Washington, DC 20210

Re: Definition of the term ooFiduciart''under the Employee Retirement Income

Security Act of 1974, as amended, Proposed Rule

Ladies and Gentlemen:

Reliance Trust Company ("Reliance") appreciates the opportunity to follow up with the

Employee Benefits Security Administration ("EBSA") regarding the definition of

"fiduciary" ("Proposed Regulation") under the Employee Retirement Income Security

Act of 1974 ("ERISA"). We have reviewed the testimony transcript from the March 2,

2011 hearing ("Hearing") and have comments in addition to those put forth in the

Reliance comment dated February 2,2011 ("Reliance Comment"). In doing so, we are

expressing our opinions as a professional ESOP trustee, a perspective we feel was not

fully considered during the Hearing.

First, we reiterate our strong objection to the Proposed Regulation as stated in the

Reliance Comment (Comment #84 on the DOL/EBSA website). We respectfully ask that

EBSA consider the following reasons for our objection to the Proposed Regulation:

o The Proposed Regulation may result in fewer ESOP institutional trustees.

o EBSA, relying on their vast experience in crafting regulations, expressed

skepticism during the Hearing over similar arguments made by representatives of

the ESOP valuation community; however, EBSA should consider that the ESOP

Association website, for example, currently lists only nine institutional trust

companies willing to serve as ESOP trustee. While anecdotal, the chief reason

Reliance has heard for this dearth of willing trustees is the risk associated with

serving as an ESOP fiduciary. As discussed more fully in the Reliance Comment,

the likely increased costs (in the form of greater insurance premiums) that will

impact multiple ESOP constituents (sponsors, valuators and trust companies),

could very well result in even fewer ESOP trustees in the future, especially given

an ever-escalatinglevel of risk associated with ESOPs.

o Unmanageable ERISA Section 405 co-fiduciary liability.

o Reliance has given this issue a greal deal of thought and simply does not see a

workable solution to divergent opinions of valuation under the Proposed

I 100 Abemathy Road I 500 Nortlpark I Suite 400 | Atlanta, cA 30328-5æ6

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Regulation. Under the current fiduciary environment, there is generally a single

person or entity, the ESOP trustee, which determines the share price of the ESOP.

Including an additional fiduciary for this pu{pose only causes confusion and risk

for both f,rduciaries. Worse still is that neither fiduciary has control over the

actions of the other fiduciary creating uncontrollable risk for them both. Of

course, it is highly unlikely that this form of risk will go unnoticed by insurance

carriers, thus exacerbating the costs mentioned above and in the Reliance

Comment.

As a status-based approach, the expansion of the term "fiduciary" will likely have the

intended effect on the 401(k) adviser market; however, production of an ESOP valuation

is more complex than creating a a01ft) investment policy statement and associated

investment lineup. Reliance agrees with other commentators that this same status-based

approach, when applied to ESOPs, does little to improve valuations and that another

regulatory approach should be adopted by EBSA if its goal is to improve the quality of

ESOP valuations.

Finall¡ Reliance respectfully asks that EBSA, in the event it moves forward with

implementation of the Proposed Regulation, add the limitation proposed in the Reliance

Comment ("Limitation"). The Limitation offers the following advantages:

o The use of independent fiduciaries is well-established by EBSA as evidenced by

various prohibited transaction exemptions in place (PTE 2003-39, for example).

o The Limitation would allow for a single third-party fiduciary for every ESOP,

thus reducing or eliminating the co-fiduciary liability mentioned above.

o The Limitation would allow highly-regarded valuation firms to remain in the

ESOP markeþlace.

We certainly hope that this alternate approach is considered by EBSA. Please do not

hesitate to contact me should you have any questions regarding this comment.

Respectfully submitted,

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Anthony A. Guthrie

President & Managing Principal, Reliance Trust Company

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Lance T. Studdard

Vice President, Reliance Trust Company

1100 Abernattry Road | 500 Nortlpart I Suite 400 | Atlanta,GA30328-596

4U 266 0663 | 800 749 0752 | www.reliance-Íust.com

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