Daniel Aronowitz, Assistant Secretary of Labor and head of the Employee Benefits Security Administration (EBSA), today delivered the closing address at The ESOP Association’s National Conference.
In his remarks, Aronowitz provided updates on EBSA’s recent initiatives regarding employee ownership and with respect to the agency’s broader regulatory duties under ERISA. He noted that when he joined EBSA last year, “the American retirement system, which is the greatest retirement system in the world, was under attack from litigation, abuse and regulatory overreach.” He noted how EBSA is addressing these issues through fair and even-handed enforcement, stopping second-guessing of responsible plan fiduciaries, and combatting ERISA class action lawsuit abuse.
With respect to ESOPs, Aronowitz told National Conference attendees that EBSA is reviewing all pending and proposed ESOP valuation investigations until EBSA complies with Congressionally mandated rulemaking on adequate consideration. He also noted the steps EBSA is taking to combat litigation abuse to restore balance to the system through the filing of amicus briefs in key cases.
Aronowitz also discussed in detail the actions that EBSA is taking to promote employee ownership through the Employee Ownership Initiative, including setting up a website and beginning to define the grantmaking process in order to get appropriated funding to the states as soon as possible. Aronowitz said his hope is that the Employee Ownership Initiative will “will help create more successful employee-owned companies and employee owners, and also contribute to the public infrastructure that can that can grow employee ownership over the long term.”
Aronowitz told the audience that ESOPs are “a strategy for anchoring jobs locally, creating intergenerational wealth and giving workers a real seat at the table,” and that “expanding employee ownership is not just good policy, but a vital investment in America's future.”
In closing, Aronowitz said he hopes EBSA’s new direction provides “clear regulatory guidance, fair and evenhanded enforcement, and our efforts to address litigation abuse demonstrate that the Department of Labor is not anti ESOP. We are pro ESOP. We are pro worker. We are champions of the American worker and the American Dream including employee ownership.”
James Bonham, The ESOP Association’s President and CEO, said: “Daniel Aronowitz’s tenure has been a breath of fresh air for ESOPs, employee owners, and plan fiduciaries. EBSA’s actions are already having a thawing effect and encouraging more business owners to consider ESOPs as a succession option, while responsible plan sponsors and trustees can now operate with the confidence that their decisions on behalf of participants will not be second-guessed. The ESOP Association is grateful for his leadership and his willingness to pursue a pro-ESOP agenda at our chief regulator.”
A full transcript of Assistant Secretary Aronowitz’s speech to The ESOP Association is available to the Association’s members here.
