Press Releases

Today, Congressman Rick W. Allen (GA-12), Chairman of the Subcommittee on Health, Employment, Labor, and Pensions, introduced the Retire Through Ownership Act, bipartisan, bicameral legislation that would provide legal and regulatory clarity in the formation of new Employee Stock Ownership Plans (ESOPs). Upon introducing the bill, Congressman Allen issued the following statement:

"Many employers and hardworking Americans elect to pursue ESOPs to increase employee ownership and to promote a secure and prosperous retirement. Unfortunately, in too many cases, these plans face unnecessary risks due to the lack of a clear regulatory framework for valuing employer stock. The bipartisan Retire Through Ownership Act is a long-overdue course correction that will help ensure those who pursue ESOPs can do so with confidence and enjoy a secure retirement."

BACKGROUND: The Employee Retirement Income Security Act of 1974 (ERISA) requires that ESOPs must pay no more than “adequate consideration” for the employer stock they purchase for the plan. When ERISA was enacted in 1974, Congress instructed the Department of Labor (DOL) to issue regulations for determining adequate consideration in the event the employer stock did not have a generally recognized market. However, final regulations have never been issued. In the absence of a clear regulatory framework, the Retire Through Ownership Act would prescribe much-needed guidelines for the valuation of employer stock, leading to a more secure retirement for many hardworking Americans.

Read the full bill text HERE.