Retire through Ownership Act
Sponsored By: Representative Allen
In Committee
Summary
Creates a limited safe harbor for ESOP valuations to define 'adequate consideration'. This bill would let an Employee Stock Ownership Plan fiduciary rely in good faith on an independent valuation expert or business appraiser if that expert used the principles and methodologies in IRS Revenue Ruling 59-60 when valuing closely held stock.
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- ESOP fiduciaries: Would get a clear safe harbor to rely on independent appraisals that use Revenue Ruling 59-60 methods. The safe harbor applies to determinations described in ERISA §3(18)(B) made on or after enactment.
- Plan participants and companies: Valuation choices used to decide whether stock was sold for "adequate consideration" would be backed by a defined appraisal standard, making those determinations more predictable.
- Federal regulators: The Secretary may still issue regulations under 5 U.S.C. §553. The safe harbor does not expand the Secretary's authority beyond what existed immediately before enactment and does not change fiduciary duties under ERISA §404.
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Bill Overview
Analyzed Economic Effects
1 provisions identified: 1 benefits, 0 costs, 0 mixed.
New ESOP valuation safe harbor
If enacted, the bill would let an ESOP fiduciary rely in good faith on a valuation from an independent appraiser when deciding if closely held stock was sold for adequate consideration. The appraiser must have used the principles and methods in IRS Revenue Ruling 59-60, including later clarifications. The safe harbor would apply only to adequacy-of-consideration valuations made on or after the Act's enactment date. It would not change a fiduciary's legal duties under ERISA and would not prevent the Secretary from issuing rules or expand the Secretary's existing authority over the term "adequate consideration."
Sponsors & CoSponsors
Sponsor
Allen
GA • R
Cosponsors
Edwards
NC • R
Sponsored 9/16/2025
Messmer
IN • R
Sponsored 9/18/2025
McBath
GA • D
Sponsored 10/10/2025
Rep. Baumgartner, Michael [R-WA-5]
WA • R
Sponsored 10/10/2025
Roll Call Votes
No roll call votes available for this bill.
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