Pro-ESOP Retirement Legislation In Final Stages
The ESOP Association has been working with Congress during this congressional session on bipartisan retirement security legislation. That important legislation – which includes provisions that affect every ESOP and employee ownership in general – is being considered in the final days of the current Congress. If this bill, which was painstakingly negotiated and enjoys broad bipartisan support, doesn’t pass now, the entire legislative process must start over next year.
TEA needs employee ownership supporters to take action today to show Congress your support for finishing the job on this important bill. Click here to send a message to your elected officials in the House and Senate, encouraging them to pass this critical legislation before the end of the year.
In summary, this bipartisan retirement security legislation contains three major priorities for our membership and ESOPs that TEA has supported for a long time.
First, it would create an Employee Ownership Initiative within the U.S. Department of Labor (DOL) to increase ESOP awareness and promote employee ownership, ensuring for the first time that the DOL has a positive voice internally on employee ownership, and not just an enforcement role.
Second, it would force the U.S. Department of Labor to finally – after 48 years – issue formal guidance on the critical issue of the adequate consideration exemption. The failure of the DOL to issue this regulation for ESOPs has led to countless lawsuits and investigations, alleging violations of essentially unwritten rules. This bill ends that long-term neglect.
Third, it would allow the section 1042 tax deferral provision currently available to C corporations to become available, in a limited way, to S corporations. While modest in scope, this is an important start to gaining tax parity between S and C corporation ESOPs.
TEA advocates and staff have been promoting all three of these critical issues for years, and all the provisions have strong support from both Republicans and Democrats. Now we need to show Congress the wide support for them among employee owners.
To stay on top of the latest activity in Washington, DC and receive regular public policy updates, please take a moment to sign up for the Employee Ownership Action Network (EOAN), which is the Association’s free grassroots advocacy network. EOAN is your best place for information on the policies that affect your ESOP. To join, click here.