On October 9, the U.S. Senate unanimously passed two essential pro-ESOP bills: the Retire Through Ownership Act (S. 2403) and the Employee Ownership Representation Act (S. 1728). This legislation could not have passed without the advocacy efforts of The ESOP Association members. After TEA members called, emailed, visited Capitol Hill, and engaged Members of Congress back home, this breakthrough became possible.
What Passed
Retire Through Ownership Act (S. 2403)
This bill, sponsored by Sen. Roger Marshall (R-KS) and Sen. Tim Kaine (D-VA), provides essential clarity on the issue of adequate consideration and will strengthen the foundation of employee ownership and ESOPs in America. The Retire Through Ownership Act would allow an ESOP plan fiduciary to rely in good faith on an independent professional expert business appraiser who utilizes the longstanding well-accepted valuation practices as described in IRS Revenue Ruling 59-60. The lack of guidance in this regard has led to countless audits, investigations and lawsuits against ESOPs by both the Department of Labor (DOL) and the plaintiff’s bar.
Employee Ownership Representation Act (S. 1728)
This bill, sponsored by HELP Committee Chairman Bill Cassidy (R-LA), would add two representatives of employee ownership organizations to the ERISA Advisory Council at the DOL and create a new Advisory Council on Employee Ownership at the DOL. This long-overdue addition will ensure that the voices of America’s employee owners are heard in the regulatory process governing retirement security. In addition, S. 1728 also incorporates the Advocate for Employee Ownership Act (S. 2474), sponsored by Senators Maggie Hassan (D-NH) and Steve Daines (R-MT) to appoint an Advocate for Employee Ownership within the existing Employee Ownership Initiative at the DOL, something The ESOP Association was instrumental in creating.
Why This Matters
Your advocacy helped the Senate deliver clarity in valuation guidance and ensured ESOP voices have a formal place in federal policymaking. With more than 6,500 ESOPs across all 50 states affecting over 14 million people and representing nearly $2 trillion in wealth, this is a major step toward a supportive regulatory environment for ESOPs.
What's Next
The next step for both bills is passage in the House of Representatives, in order to send them to the President’s desk for signature. We will continue to keep The ESOP Association members updated on the latest developments on the way to making this legislation the law of the land.
Thank you for everything you did to reach this point! Your persistence and engagement made this progress possible.
