Congressman Rick W. Allen (GA-12), who serves as Chairman of the Subcommittee on Health, Employment, Labor, and Pensions, has introduced the Retire Through Ownership Act. This bipartisan and bicameral bill aims to clarify legal and regulatory guidelines for forming new Employee Stock Ownership Plans (ESOPs).
In a statement accompanying the bill’s introduction, Congressman Allen said: “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.”
The legislation addresses an issue stemming from the Employee Retirement Income Security Act of 1974 (ERISA). ERISA requires ESOPs to pay no more than “adequate consideration” for employer stock purchased for the plan. While Congress directed the Department of Labor to issue regulations regarding adequate consideration when there is no recognized market for employer stock, such regulations have not been finalized since 1974. The proposed act seeks to provide clear guidelines for valuing employer stock in ESOPs.
Congressman Allen has maintained his seat through several election cycles. In 2024, he won against Elizabeth Johnson with 60.3% of the vote; similar results occurred in previous years, including victories over Elizabeth Johnson in 2022 and 2020, Francys Johnson in 2018, Patricia C. McCracken in 2016, and John Barrow in 2014.
For more information about the bill or its full text, readers are encouraged to review official sources.
