[Code of Federal Regulations]

[Title 29, Volume 9]

[Revised as of July 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 29CFR2509.75-9]



[Page 355-356]

 

                             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 356]]



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]