Employee Ownership Fairness Act of 2025
Sponsored By: Senator Cassidy, Bill [R-LA]
Introduced
Summary
Exempts employer-stock contributions and repayments of ESOP loans from certain retirement contribution limits and treats ESOPs as separate from other defined contribution plans. The bill would change how ESOPs count contributions and forfeitures when applying limits under the Internal Revenue Code and ERISA, aiming to ease barriers to diversification and matching contributions for employee stock ownership plans (ESOPs).
Show full summary
- Employees in ESOPs would no longer have employer stock contributions or loan-repayment contributions counted toward some employer deduction and annual addition limits. This gives ESOP participants more room to receive stock and cash contributions without hitting those limits.
- Workers with both an ESOP and another defined contribution plan would see limits under section 404 and section 415 applied separately to the ESOP and to other plans. That separation could allow fuller contributions to both plan types.
- Employers could find it easier to offer matching or other employer contributions because the bill targets rules the findings say can discourage matching.
- Plan administrators would stop counting forfeitures allocated to ESOP accounts as annual additions under section 415, changing how annual additions are calculated.
The amendments would apply to plan years beginning after the date of enactment.
Personalized for You
How does this bill affect your finances?
Personalize government policy and PRIA will tell you what this bill means for your household, plus every other piece of legislation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.
Bill Overview
Analyzed Economic Effects
1 provisions identified: 0 benefits, 0 costs, 1 mixed.
New rules for employee stock plans
If enacted, this bill would change how employee stock ownership plans (ESOPs) count employer stock and loan repayments for retirement limits. Employer stock contributions and contributions that repay loans used to buy employer securities would not count toward certain section 404 and 415 contribution limits. Employers would apply section 404 limits separately for an ESOP and for any other defined contribution plan. Forfeitures allocated to ESOP accounts would not count as annual additions. These rules would apply to plan years starting after enactment and could change how much employers put into ESOP accounts versus other retirement plans.
Sponsors & CoSponsors
Sponsor
Cassidy, Bill [R-LA]
LA • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov