In The News

Originally Published in WRDW
By: Staff

AUGUSTA, Ga. (WRDW/WAGT) - A bill introduced by Congressman Rick Allen is now headed to President Donald Trump’s desk.

On Wednesday, the U.S. House of Representatives passed the “Retire through Ownership Act,” a bill aimed at giving businesses and workers more certainty when setting up Employee Stock Ownership Plans, or ESOPs.

The measure, S. 2403, cleared the House on a bipartisan 401–14 vote.

Allen, who introduced the House version of the bill, said ESOPs are an important way for workers to build retirement wealth by owning a share of the company where they work.

“True success is measured by the success of your employees,” Allen said in a statement.

“ESOPs are a valuable tool to build wealth for retirement and give employees an ownership stake in their employer. The Retire through Ownership Act will help eliminate the regulatory ambiguity and unnecessary risks these plans often face while providing a clear framework for valuing employer stock.”

ESOPs allow employees to accumulate company stock in a retirement account. But when an ESOP buys shares in a privately held company, federal law currently offers little clear guidance on how that stock should be valued.

The Department of Labor has not finalized detailed rules, leaving ESOP trustees exposed to lawsuits and regulatory uncertainty over whether they paid a fair price.

Supporters say that uncertainty has discouraged some business owners from selling to employees and has made it harder to start new ESOPs. The bill aims to fix that by spelling out when ESOP trustees can rely on an independent appraisal.

If signed into law, the bill would not create new ESOPs on its own, but it is designed to make it easier and less risky for companies to form them by aligning Labor Department expectations with IRS valuation standards.