From: Dana Schurr [mailto:Dana.Schurr@minco.com] 

Sent: Wednesday, February 02, 2011 7:17 PM 

To: EBSA, E-ORI - EBSA 

Subject: Definition of Fiduciary Proposed Rule 

February 2, 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:

I am the CEO of Minco Products, Inc. and we have an ESOP with almost 600 participants. The 

proposed rule to define the appraiser as a fiduciary would increase our costs and would HARM 

our ESOP participants.

Here are 8 reasons why the DOL proposed regulations should be modified to remove the 

requirement that persons providing ESOP appraisals and fairness opinions are fiduciaries: 

1. The cost to perform an ESOP appraisal would significantly increase. The firm performing 

our ESOP appraisal would need to obtain additional and more expensive insurance, hire 

counsel, and take additional steps to comply with the regulations and manage the 

additional risk of litigation. These additional costs will be passed through to Minco and 

negatively impact the accounts of our ESOP participants.

2. The previously-mentioned additional cost and risk associated with performing ESOP 

appraisals would cause some to leave the appraisals industry. This would reduce the 

number and quality of available appraisers, which would further increase the cost of 

performing an appraisal and decrease the quality. These additional costs will also be 

passed through to Minco and negatively impact the accounts of our ESOP participants.

3. The Internal Revenue Code requires that an appraiser be independent. The fiduciary 

responsibility to the plan participants would violate that independence.

4. At Minco, the ESOP owns 33% of our shares. The previously-mentioned lack of 

independence would likely cause a selling shareholder to hire a second valuation firm, 

further increasing the cost of implementing and maintaining an ESOP, and further 

negatively impacting the accounts of ESOP participants.

5. The fiduciary responsibilities of the trustee and appraiser would be unclear and would 

create confusion problems in determining who is responsible for what and how each 

party is supposed to satisfy their fiduciary obligations.

6. The increased costs to maintain our ESOP might cause us to terminate the ESOP. This 

would negatively impact our ESOP participants.

7. The DOL proposed regulations do not address the root causes of the problems you have 

identified. These problems include a lack of clear, concise and current valuation 
regulations and a lack of professional competence standards, qualifications, and/or 

credentials to perform an ESOP appraisal.

8. ESOP trustees are fiduciaries that are currently responsible for determining the fair 

market value. Existing case law and current regulations provide remedies for when the 

ESOP trustee is using an incorrect valuation and when appraisers are acting with 

discretion over plan assets. Remedies also exist for parties that are not satisfying their 

legal, fiduciary, and contractual responsibilities.

Please consider my comments and those from others in the ESOP community and contemplate 

their impact.

We respectfully request that you modify the DOL proposed regulations to remove the requirement 

that persons providing ESOP appraisals and fairness opinions are fiduciaries. If you do not find 

that current regulations provide sufficient remedies, working with the ESOP professional 

community to create professional standards and enforcement procedures and providing the 

community with clear guidance are two solutions that would effectively address your concerns.

Sincerely,

Dana Schurr 

CEO 

Minco Products, Inc. 

Direct TEL: 763-586-2873 

FAX: 763-571-0927