The U.S. Senate Committee on Health, Education, Labor & Pensions (HELP) today voted to advance Acting Secretary Keith Sonderling’s nomination for Secretary of Labor to the full Senate for a final confirmation vote. The ESOP Association strongly supports Keith Sonderling to lead the Department of Labor.
“ESOPs and millions of employee owners need a strong leader like Keith Sonderling at the Department of Labor to ensure retirement savings are protected while encouraging the growth of broad-based ownership,” said James Bonham, President and CEO of The ESOP Association. “We thank Chairman Cassidy and the HELP Committee for moving swiftly and look forward to Mr. Sonderling being confirmed by the full Senate soon.”
Since becoming Deputy Secretary of Labor, Sonderling has advanced a regulatory and enforcement approach that has been welcomed by ESOP companies, plan fiduciaries, and employee owners. Working with Assistant Secretary Daniel Aronowitz and the Employee Benefits Security Administration (EBSA), he has driven a shift at the Department toward a more balanced and predictable approach to ESOP oversight.
In January, Sonderling announced that EBSA was changing its enforcement priorities, which included removing ESOPs “to ensure an even-handed, responsive approach to investigations to produce the best results for American workers, retirees, and their families.” He said that the new enforcement priorities will make investigations “more efficient, responsive, and prioritize serious misconduct rather than minor foot faults.”
The ESOP Association also supports Sonderling's emphasis on providing clear regulatory guidance, particularly as it relates to the "adequate consideration" standard for ESOP transactions. For too long, plan fiduciaries have been forced to navigate an inconsistent patchwork of court decisions, settlements, withdrawn regulations, and informal agency interpretations rather than clear federal rules. That uncertainty has increased litigation, discouraged ESOP formation, and limited opportunities for more American workers to become employee owners.
Sonderling has also called for ending "regulation by litigation" and reducing meritless ERISA lawsuits that drive up costs for plan sponsors. This approach, combined with balanced enforcement and clear regulatory guidance, will create a stronger environment for new ESOP formation and the growth of employee ownership.
