The U.S. House of Representatives passed the Retire Through Ownership Act (S. 2403) on September 16 by an overwhelming bipartisan vote of 401–14, sending the legislation to the president for his signature. The vote followed the Senate’s unanimous passage of the bill in October 2025. This monumental accomplishment would not be possible without years of relentless advocacy from The ESOP Association members.
The importance of this legislation becomes clear in the context of an ESOP transaction and its key stakeholders. When a business owner decides to sell their business to their employees through an ESOP, a fiduciary represents the interests of all ESOP participants in the transaction. A crucial part of an ESOP transaction is the process of determining the value of company stock so that the business owner receives a fair price and the employees do not overpay for the company. This process is known as “adequate consideration.” Because ESOPs are a Qualified Retirement Plan under ERISA, the Department of Labor (DOL) has oversight of the transaction. The common practice for ESOP fiduciaries to determine adequate consideration is to rely on independent professional appraisers using longstanding valuation principles to determine the value of company stock.
The Retire Through Ownership Act codifies this practice, ensuring stakeholders in an ESOP transaction and the DOL use the same process when establishing an ESOP and in subsequent valuations. This gives employee owners confidence in the process used to determine the value of their retirement savings, and business owners confidence in the process used when selling their business to an ESOP.
The need for this legislation came from decades of uncertainty due to the absence of clear regulations from the DOL defining adequate consideration. Even when fiduciaries retained qualified, independent valuation professionals and followed prudent processes, they still faced decades of debilitating, targeted investigations and litigation. The ensuing costs hurt employee owners and existing ESOPs, discouraged the creation of new ones, and limited opportunities for more American workers to build wealth through ESOPs.
The Retire Through Ownership Act addresses that uncertainty by codifying a clear and well-known valuation process without weakening the protections provided to employee owners under federal law. That clarity will strengthen existing ESOPs while removing a significant obstacle for business owners considering an ESOP transition. As more owners view ESOPs as a viable succession option, more workers will have opportunities to build retirement security and share in the value they help create.
The 401–14 vote demonstrates the remarkable bipartisan support employee ownership has earned. The bill was introduced by Senators Roger Marshall (R-KS) and Tim Kaine (D-VA), while Representative Rick Allen (R-GA) introduced the House companion that advanced with strong bipartisan support in committee. Democrats and Republicans came together around a practical policy that protects workers, strengthens retirement security and expands economic opportunity.
But the final vote should not be mistaken for evidence that passage was easy.
This result was possible because thousands of members of The ESOP Association (TEA) advocated for this bill for more than a year. Over 250 TEA members traveled to Washington in May of 2025 and 2026 for hundreds of meetings to educate their members of Congress about the legislation. Hundreds more called and emailed their elected officials to urge them to support it. Chapter officers walked the halls of Congress with information on this issue, delivering TEA’s Public Policy Council policy statement and sharing our members’ experiences hundreds of times with elected officials and their staff. Those members of Congress, in turn, went to congressional leaders and advocated for the bill to receive a vote on the House and Senate floors.
Passing any legislation requires persistent work by many kinds of advocates—from company CEOs to employee owners—and engagement at every level of government, from the West Wing to the newest legislative assistant on Capitol Hill. TEA members demonstrated that they have the commitment and influence necessary to sustain that effort.
TEA thanks every member who made a call, sent an email, attended a meeting, or shared their ESOP story. This victory belongs to you.
Now, TEA will continue using the power TEA members have built to improve the lives of ESOP employee owners and continue to spread the benefits of ESOPs nationwide.
