ESOP Advocacy Issues

BACKGROUND 

• ESOPs deliver substantial societal benefits by improving job security, worker retention, and company performance while promoting local economic prosperity and reducing wealth inequality. 

LEGISLATIVE OPPORTUNITIES

1. Promote ESOP Representation, Transparency, and Litigation Reform at the Department of Labor 

BACKGROUND

• Many ESOPs never form, or dissolve their ESOP, because of a lack of access to capital – a key factor limiting the growth of the number of ESOPs and employee ownership. 
• The American Ownership and Resilience Act (AORA), modeled on the successful SBIC program at the Small Business Administration, would help motivate private capital investment with federal loan guarantees to specifically support ESOP formation and recapitalization. 

SUMMARY 

• The goal of AORA is to advance employee ownership by leveraging the full faith and

LEGISLATION OVERVIEW 

• The Retire Through Ownership Act is a bipartisan bill that allows ESOP fiduciaries to rely on independent valuation experts using longstanding IRS guidelines to value ESOP stock. 
• This simple clarification would be a major catalyst for new ESOP formation and provide essential clarity for existing ESOPs after decades of uncertainty and litigation. 
• It passed the Senate and House Education and Workforce Committee unanimously. 
• It just needs a vote on the House Floor before being signed