From: Fitz-Gerald, Dave [mailto:dave.fitzgerald@carris.net] 

Sent: Thursday, February 03, 2011 9:27 AM 

To: EBSA, E-ORI - EBSA 

Cc: Cota, Greg (Leahy); Gunnels, Warren (Sanders) 

Subject: Comments on the DOL Proposed Regulation - Definition of the Term "Fiduciary" 

(Federal Register, Volume 75, Number 204, Pages 65263-6578, October 22, 2010, Proposed 

Regulation)

Via email: e-ORI@dol.gov

CC: Greg Cota, in Senator Leahy’s office Greg_Cota@leahy.senate.gov

CC: Warren Gunnels, in Senator Sanders’ office

Warren_Gunnels@sanders.senate.gov

February 3, 2011

Mr. Fred J. Wong 

Employee Benefits Security Administration 

U.S. Department of Labor 

Office of Regulations and Interpretations Room N-5655 

200 Constitution Avenue, NW 

Washington, DC 20210

SUBJECT: Comments on the DOL Proposed Regulation – Definition of the Term 

"Fiduciary" (Federal Register, Volume 75, Number 204, Pages 65263-6578, 

October 22, 2010, Proposed Regulation)

Dear Mr. Wong:

My name is David Fitz-Gerald and I am the VP, CFO and Treasurer of Carris 

Financial Corp, a 100% employee-owned packaging manufacturing company 

headquartered in Rutland, Vermont. I am also a Trustee for the CFC ESOP. Our 

company has about 380 employee-owners in 8 divisions across the country. Our 

ESOP was founded in 1995, and we became 100% employee-owned in 2008. At 

Carris we know first-hand how meaningful it is for employees to share in the 

ownership of the company. We are very engaged in a community of employeeowned companies, and I proudly serve as President of the New England Chapter 

of The ESOP Association, and on the Board of Directors of the Vermont 

Employee Ownership Center (VEOC). 

I’m writing to express my concerns about a rule proposed by the DOL which 

would significantly expand the definition of a “fiduciary” under ERISA. As I 

understand it, valuation firms that prepare appraisals and fairness opinions for 

closely held companies would be included as fiduciaries. Each year, closely held, 

employee-owned companies such as Carris are valued by an independent 
external valuation firm, and the Trustees of the ESOP Plan determine the value 

based on the valuation firm’s report. This is a responsibility that our Trustee 

committee takes very seriously. Another duty of our Trustee committee is to 

select a valuation advisor. Fortunately, there is a good number of high quality, 

affordable advisors to choose from. When we have made requests for proposals, 

there have been large differences in price – from $10,000 on the low side to 

$40,000 on the high side. The primary difference in cost is the larger firm’s 

overhead and profit margin requirements. As a Trustee of Carris’ ESOP Plan we 

always want to be sure that our valuation advisor is a well qualified expert. We 

look for membership in The ESOP Association and the American Society of 

Appraisers, and we look for our valuation advisor when we attend ESOP 

conferences. 

My concern is that the proposed rule will result in much higher annual costs of 

conducting the Plan’s business. Valuation firms will now be exposed to real or 

perceived additional risk. It is expected that the price of valuation reports will 

dramatically increase as a result of this proposed rule. A bigger concern is that 

well qualified valuation advisors will make the decision to no longer provide 

valuations for the ESOP community, and of course less competition means 

higher prices and fewer new employee-owned companies. 

One requirement is that the valuation firm be independent of the company it is 

appraising. I don’t understand how the valuation firm can be independent if the 

valuation firm is also a fiduciary. Would it make sense to have the CPA Audit firm 

be a fiduciary as well? There are certainly very stringent independence 

requirements for CPAs. 

It isn’t clear to me whether the DOL believes that some valuations are done 

improperly or whether the valuation methodologies themselves are flawed. Given 

that the same valuation methodologies are used to pay out selling shareholders 

and plan participants, it would seem that the system is working as it should be. 

Whatever the answer, if there is a problem I would hope that the solution is not 

detrimental to the employee-ownership movement. Perhaps it is overly naive to 

suggest that it feels like in grade school when the whole class is punished for 

something one kid did in the back row. Of course, if that comparison were 

applicable the DOL has plenty of remedies. The DOL has a very important role 

in looking out for plan participants. I understand there are unscrupulous people, 

and appreciate the job the DOL does to protect people. I am afraid in this case 

that millions of future potential employee-owners will lose the opportunity to 

share in the personal and financial rewards of owning a part of the company they 

work for. 

Sincerely,
Dave Fitz-Gerald 

VP, CFO & Treasurer 

Carris Financial Corp an employee-owned company

49 Main Street 

Proctor, VT 05765 

802-770-3560 

www.carris.com

dave.fitzgerald@carris.net