Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.
Compliance April 30, 2015
ESOP Bill Introduced in U.S. House
U.S. Representatives Dave Reichert (R-Washington) and Ron Kind (D-Wisconsin) introduced a bill to encourage the creation of S Corporation Employee Stock Ownership Plans (S ESOPs).
Reported by Rebecca Moore
The Promotion and Expansion of Private Employee Ownership Act of 2015 (H.R. 2096) includes provisions to encourage owners of S Corporations to sell their stock to an ESOP, expand financing opportunities for S Corporation ESOPs, provide technical assistance for companies that may be interested in forming an S Corporation ESOP, and ensure that small businesses that become ESOPs retain their Small Business Association certification. Similar legislation has been introduced in the past.
“This legislation is critical to giving employees ownership over their work and retirement in a time when many people are concerned about their retirement savings,” says Reichert.
“By making it easier for companies to become employee-owned, this legislation will not only grow the number of employee owned businesses, it will provide retirement security to more Americans,” Kind adds. “Employee-owned companies perform better – not just for themselves but for every one of their employees as well.”
A recent report from Ernst & Young revealed S corporation ESOPs outperformed the S&P 500 total return index in terms of total return per participant by 62% from 2002 to 2012.
“We need policies to encourage employee stock ownership, and the proposed policies in H.R. 2096, should address core social issues such as adequate retirement security and making sure working Americans have an ownership stake in our capitalistic system,” said ESOP Association President, J. Michael Keeling, in a statement.