On May 6, members of The ESOP Association will have meetings on Capitol Hill to communicate a simple request: support policies that help ESOPs and employee owners succeed.
You can think of our policy agenda like driving a car. To drive, you need rules of the road, access to the road, and protection on the road. For ESOPs, that means clear rules to value an ESOP, access to capital to form and expand ESOPs, and protection from unfounded litigation and private equity firms’ attempts to redefine ESOPs.
Rules of the Road: Put the Retire Through Ownership Act on the House Floor
Our top priority in the House of Representatives is clear: we’re asking all Members of Congress to support the Retire Through Ownership Act on the House floor.
This legislation is on the brink of becoming law. The Senate has already passed it unanimously, and the bill has already advanced through the House Education and Workforce Committee unanimously. A House floor vote is the last major step before it can be signed into law by the President.
The bill would help bring long-overdue clarity to one of the most important issues facing ESOPs: how fiduciaries make a good-faith determination of fair market value for company stock. For too long, ESOPs have operated without clear guidance from the Department of Labor. Passing the Retire Through Ownership Act would be a major step toward restoring certainty and confidence.
Access to the Road: Cosponsor AORA
Our top priority in the Senate is the American Ownership and Resilience Act (AORA). This bill could lead to an unprecedented increase in employee ownership by expanding access to private capital for ESOP formation and recapitalization.
AORA would create a new pathway to unlock investment in employee ownership through federal loan guarantees that work with private capital. In short, it is designed to address one of the biggest barriers to ESOP growth: access to capital. This is also an important priority in the House, where the companion bill also has bipartisan cosponsors.
Protection on the Road: More Ways to Support ESOPs
There are so many pro-ESOP bills and policy opportunities moving through Congress right now that it can be difficult to cover them all in a single meeting. That is why ESOP Advocacy Day attendees will bring a one-pager highlighting several additional ways lawmakers can protect and expand ESOPs.
These opportunities include:
- Protecting ESOPs from private equity “Short Term Equity Plan” experiments
- Promoting ESOP representation, transparency, and litigation reform at the Department of Labor
- Supporting funding for the Department of Labor’s Employee Ownership Initiative
- Removing ESOP contributions from IRS Sections 404 and 415
Your Priority: Tell Your ESOP Story!
Attendees do not have to be policy experts to make an impact. At Advocacy Academy on May 5, The ESOP Association will further explain these requests and provide the materials to communicate these requests clearly. The most important thing attendees can do is come to Washington and tell their ESOP story. That is what moves Members of Congress to take action on behalf of ESOPs.
We can’t wait to see you in DC! Click here sign up for Advocacy Academy, ESOP Advocacy Day, and National Conference!
