Bill Promotes Retirement Savings Through Private Employee Ownership

WASHINGTON, D.C. — Members of the U.S. House Ways and Means Committee, including U.S. Reps. Richard Neal (D-Mass.), Dave Reichert (R-Wash.), Ron Kind (D-Wis.), Erik Paulsen (R-Minn.), Earl Blumenauer (D-Ore.), Pat Tiberi (R-Ohio), Charles Boustany (R-La.), and Bill Pascrell (D-N.J.), have introduced legislation designed to spur more employee ownership in private industry. The Promotion and Expansion of Private Employee Ownership Act of 2014 aims to eliminate barriers that a business and its owners currently face in establishing a new S corporation ESOP or expanding the employee-ownership stake in an S corporation. Congress created the S-corporation ESOP structure to encourage and expand retirement savings, giving more workers in private companies the chance to own their companies through an ESOP-qualified retirement savings program. Among its provisions, the bill aims to enable owners of S corporations to sell their stock to an ESOP, encourage the flow of bank capital to ESOP-owned S corporations, provide needed technical assistance for companies that may be interested in forming an S ESOP, ensure that small businesses that become ESOPs retain their SBA certification, and affirm the importance of preserving the S ESOP structure in the Internal Revenue Code. “At a time when almost half of American workers lack retirement accounts, the S ESOP structure lets employees share in the capital as owners of their companies and provides workers meaningful retirement accounts,” said Reichert. Added Kind, “this bill empowers companies to become employee-owned, creates new employee owners, and provides retirement security to more American workers. Growing our economy and adding jobs is a priority, and employee ownership is a proven model to do just that.”