ESOP Proposal Introduced in House

Representative Rick Allen (R-GA) has introduced the Retire through Ownership Act. According to a press release, Congress instructed the Department of Labor (DOL) with the passage of the Employee Retirement Income Security Act of 1974 (ERISA) to issue regulations for determining adequate consideration in the event employer stock did not have a generally recognized market. However, final regulations have never been issued.

The bill would amend the definition of “adequate consideration” under ERISA to provide a fiduciary with good faith reliance on the methodologies set forth under Internal Revenue Service Revenue Ruling 59-60 in determining the fair market value of an asset, as modified from time to time. A companion bill introduced in the Senate by Roger Marshall (R-KS) and co-sponsor Tim Kaine (D-VA), advanced out of the Senate Health, Education, Labor, and Pension (HELP) committee in July.