GRGDM LAW GROUP

Jennifer E. Eller
(202) 861-6604
ce@groom.com

February 8, 2011

By Electronic Mail to e-ORI@dol.gov

Office of Regulations and Interpretations
Employee Benefits Security Administration
Attn: Fiduciary Definition Hearing

Room N-5655

U.S. Department of Labor

200 Constitution Avenue, N.W.
Washington, D.C. 20210

Re: Written Request to be Heard and Outline of Proposed Testimony on the
Definition of Fiduciary Proposed Rule

Ladies and Gentlemen:

This written request to testify at the public hearing to be held on March 1 and March 2,
2011 is being submitted in response to the Notice of Public Hearing on the proposed rule
defining when a person will be considered a "fiduciary" by reason of giving investment advice to
a plan or to the plan's participants and beneficiaries, published in the Federal Register on January
12, 2011.

Jennifer E. Eller will present testimony on behalf of a coalition of firms engaged in the
management of real estate assets and the business of valuing and appraising real estate (the "Real
Estate Appraisal Coalition"). On an annual basis, Real Estate Appraisal Coalition members are
responsible for providing valuation services with respect to over $500 billion in real estate assets
belonging to thousands of employee benefit plans subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").

As indicated in the Notice of Public Hearing, we expect the testimony to take 10 minutes,
and we will be prepared to answer the Department's questions. We may remark upon any of the
issues discussed in our comment letter, although if time permits we expect to specifically address
the points below.

Groom Law Group, CHARTERED
1701 Pennsylvania Ave., NW. « Washington, D.C. 20006-5811
202-857-0620 + Fax: 202-659-4503 « www.groom.com


GRCDM. LAW GROUP

Office of Regulations and Interpretations
February 8, 2011
Page 2

Outline of Testimony

I. Introduction (1 minute)

¢ Coalition members provide real estate appraisal and valuation services with respect to
$500 billion in real estate related assets held by ERISA-covered retirement plans.

Il. Imposing ERISA fiduciary standards on real estate appraisers is unnecessary,
burdensome, and would not benefit ERISA plan participants and beneficiaries (5
minutes)

e The Uniform Standards of Professional Appraisal Practice ("USPAP") apply to
appraisals and value opinions issued in connection with real estate investments of
ERISA-covered plans.

o Establishment and enforcement of USPAP standards are overseen by
federal regulators.

o The USPAP standards are comprehensive and protect plan investors from
appraiser misconduct, including fee conflicts.

e USPAP standards are universally incorporated into the policies that federal and state
financial institutions use in hiring and monitoring real estate appraisers. Imposing
ERISA's fiduciary standards on real estate appraisers would force appraisers and
financial institutions to operate under two sets of standards. This approach would be
burdensome and would result in greater costs imposed on plans, without any
corresponding benefit.

Ill. | ERISA imposes fiduciary responsibility for reporting the fair value of plan assets on a
plan's "administrator." To the extent the Department is concerned about valuation of real
estate assets held by plans, the Department should consider issuing guidance to existing
plan fiduciaries, rather than expanding the fiduciary definition. (2 minutes)

IV. If the Department determines that real estate appraisers may properly be considered
investment advice fiduciaries in some circumstances, the Department should also craft a
workable limitation so that a person acting in accordance with USPAP will not be
deemed to be a fiduciary. (2 minutes)


GRGOM LAW GROUP

Office of Regulations and Interpretations
February 8, 2011
Page 3

We appreciate the opportunity to testify on this important proposal.

Sincerely,