Retire through Ownership Act
Sponsored By: Senator Sen. Marshall, Roger [R-KS]
Passed Senate
Summary
Clarifies how closely held stock in Employee Stock Ownership Plans (ESOPs) is valued. It amends Section 3(18) of the Employee Retirement Income Security Act to let ESOP fiduciaries rely in good faith on independent valuations that follow the methods in IRS Revenue Ruling 59-60 while preserving the Secretary's authority to issue rules and keeping ERISA fiduciary duties in place.
Show full summary
- ESOP fiduciaries and trustees: They may rely on valuations from independent appraisers that use IRS Rev. Rul. 59-60 methods when determining "adequate consideration." This reliance applies to determinations made on or after the date of enactment.
- Workers and plan participants: Participants in ESOPs get a clearer, more predictable standard for how closely held company stock is valued. That clarity can affect the prices used in ESOP transactions and the value members receive.
- Employers and sellers to ESOPs: Companies selling closely held stock to an ESOP gain a more defined valuation process. Using appraisals tied to IRS guidance may make sales and financing for ESOP transactions smoother.
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Bill Overview
Analyzed Economic Effects
1 provisions identified: 1 benefits, 0 costs, 0 mixed.
New ESOP valuation reliance rule
If enacted, ESOP fiduciaries would be able to rely in good faith on an independent valuation that followed IRS Revenue Ruling 59-60 methods. The valuation must come from an independent valuation expert or business appraiser. This would not change a fiduciary's duties under ERISA section 404. It would not let the Labor Secretary expand authority over the term "adequate consideration" beyond what existed before enactment. The rule would apply to determinations made on or after the date of enactment.
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Sponsors & CoSponsors
Sponsor
Sen. Marshall, Roger [R-KS]
KS • R
Cosponsors
Sen. Kaine, Tim [D-VA]
VA • D
Sponsored 7/23/2025
Roll Call Votes
No roll call votes available for this bill.
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