Kaine's Bipartisan Bill To Help Workers Share In Company Profits Becomes Law

WASHINGTON, D.C. – U.S. Senator Tim Kaine’s (D-VA) bipartisan Retire through Ownership Act has become law. The bipartisan legislation, which he introduced with Senator Roger Marshall (R-KS), will facilitate the establishment and operation of employee stock ownership plans (ESOPs). ESOPs allow workers to directly share in the profits they help their company earn, leading to higher wages and more wealth-building.

“Employee stock ownership plans are good for workers and businesses because they provide opportunities for employees to benefit in a company’s financial success and gives them more ownership in their workplace,” said Kaine, a member of the Senate Health, Education, Labor and Pensions (HELP) Committee. “I’m glad that this bipartisan legislation to provide clearer guidance to businesses that establish and operate ESOPs was signed into law.”

“The Retire Through Ownership Act is about protecting the retirement security of millions of Americans,”said James Bonham, President and CEO of The ESOP Association. “Senators Kaine and Marshall brought strong bipartisan leadership to a challenge that has hindered employee ownership for decades. Their efforts will give employee owners greater confidence in how their shares are valued and business owners a clearer path toward ESOP transitions. We applaud Senator Kaine for helping deliver this commonsense solution.”

The Retire through Ownership Act amends the Employee Retirement Security Act of 1974 (ERISA) to clarify that companies operating in good faith can use long-standing Internal Revenue Service (IRS) guidance on valuing shares to determine “adequate consideration” in an ESOP transaction, thus eliminating a source of uncertainty for companies establishing or operating ESOPs.

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