[Code of Federal Regulations]
[Title 29, Volume 9]
[Revised as of July 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR2509.75-9]

[Page 337-338]
 
                             TITLE 29--LABOR
 
 CHAPTER XXV--EMPLOYEE BENEFITS SECURITY ADMINISTRATION, DEPARTMENT OF 
                                  LABOR
 
PART 2509_INTERPRETIVE BULLETINS RELATING TO THE EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974--Table of Contents
 
Sec. 2509.75-9  Interpretive bulletin relating to guidelines on 
independence of accountant retained by Employee Benefit Plan.

    The Department of Labor today announced guidelines for determining 
when a qualified public accountant is independent for purposes of 
auditing and rendering an opinion on the financial information required 
to be included in the annual report filed with the Department.
    Section 103(a)(3)(A) requires that the accountant retained by an 
employee benefit plan be ``independent'' for purposes of examining plan 
financial information and rendering an opinion on the financial 
statements and schedules required to be contained in the annual report.
    Under the authority of section 103(a)(3)(A) the Department of Labor 
will not recognize any person as an independent qualified public 
accountant who is in fact not independent with respect to the employee 
benefit plan upon which that accountant renders an opinion in the annual 
report filed with the Department of Labor. For example, an accountant 
will not be considered independent with respect to a plan if:
    (1) During the period of professional engagement to examine the 
financial statements being reported, at the date of the opinion, or 
during the period covered by the financial statements, the accountant or 
his or her firm or a member thereof had, or was committed to acquire, 
any direct financial interest or any material indirect financial 
interest in such plan, or the plan sponsor, as that term is defined in 
section 3(16)(B) of the Act.
    (2) During the period of professional engagement to examine the 
financial statements being reported, at the date of the opinion, or 
during the period covered by the financial statements, the accountant, 
his or her firm or a member thereof was connected as a promoter, 
underwriter, investment advisor, voting trustee, director, officer, or 
employee of the plan or plan sponsor except

[[Page 338]]

that a firm will not be deemed not independent in regard to a particular 
plan if a former officer or employee of such plan or plan sponsor is 
employed by the firm and such individual has completely disassociated 
himself from the plan or plan sponsor and does not participate in 
auditing financial statements of the plan covering any period of his or 
her employment by the plan or plan sponsor. For the purpose of this 
bulletin the term ``member'' means all partners or shareholder employees 
in the firm and all professional employees participating in the audit or 
located in an office of the firm participating in a significant portion 
of the audit;
    (3) An accountant or a member of an accounting firm maintains 
financial records for the employee benefit plan.
    However, an independent, qualified public accountant may permissably 
engage in or have members of his or her firm engage in certain 
activities which will not have the effect of removing recognition of his 
or her independence. For example, (1) an accountant will not fail to be 
recognized as independent if at or during the period of his or her 
professional engagement with the employee benefit plan the accountant or 
his or her firm is retained or engaged on a professional basis by the 
plan sponsor, as that term is defined in section 3(16)(B) of the Act. 
However, to retain recognition of independence under such circumstances 
the accountant must not violate the prohibitions against recognition of 
independence established under paragraphs (1), (2) or (3) of this 
interpretive bulletin; (2) the rendering of services by an actuary 
associated with an accountant or accounting firm shall not impair the 
accountant's or accounting firm's independence. However, it should be 
noted that the rendering of services to a plan by an actuary and 
accountant employed by the same firm may constitute a prohibited 
transaction under section 406(a)(1)(C) of the Act. The rendering of such 
multiple services to a plan by a firm will be the subject of a later 
interpretive bulletin that will be issued by the Department of Labor.
    In determining whether an accountant or accounting firm is not, in 
fact, independent with respect to a particular plan, the Department of 
Labor will give appropriate consideration to all relevant circumstances, 
including evidence bearing on all relationships between the accountant 
or accounting firm and that of the plan sponsor or any affiliate 
thereof, and will not confine itself to the relationships existing in 
connection with the filing of annual reports with the Department of 
Labor.
    Further interpretive bulletins may be issued by the Department of 
Labor concerning the question of independence of an accountant retained 
by an employee benefit plan.

[40 FR 53998, Nov. 20, 1975, as amended at 40 FR 59728, Dec. 30, 1975. 
Redesignated at 41 FR 1906, Jan. 13, 1976]