RETIRE THROUGH OWNERSHIP ACT

On 2026-09-16, Representative Rick W. Allen (R-GA-12) delivered a floor speech titled "RETIRE THROUGH OWNERSHIP ACT" in the House.

RETIRE THROUGH OWNERSHIP ACT

Congressional Record, Volume 172 Issue 146 (Wednesday, September 16, 2026) [Congressional Record Volume 172, Number 146 (Wednesday, September 16, 2026)] [House] [Pages H5905-H5906] From the Congressional Record Online through the Government Publishing Office [ www.gpo.gov ] RETIRE THROUGH OWNERSHIP ACT Mr. WALBERG. Mr. Speaker, I move to suspend the rules and pass the bill (S. 2403) to amend the Employee Retirement Income Security Act of 1974 to provide a clear definition of adequate consideration for certain closely held stock, and for other purposes. The Clerk read the title of the bill. The text of the bill is as follows: S. 2403 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``Retire through Ownership Act''. SEC. 2. AMENDING ADEQUATE CONSIDERATION DEFINITION. (a) In General.--Section 3(18) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002(18)) is amended-- (1) by redesignating clauses (i) and (ii) as subclauses (I) and (II), respectively; (2) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively; (3) by inserting ``(A)'' before ``The term''; and (4) by adding at the end the following: ``(B)(i) For purposes of clause (ii) of subparagraph (A), a fiduciary of an employee stock ownership plan (as defined in section 407(d)(6)) may make a good faith reliance on a valuation provided by an independent valuation expert or business appraiser that has relied upon the principles and methodologies set forth in Internal Revenue Service Revenue Ruling 59-60 (as amplified and modified by the Internal Revenue Service from time to time) in determining the fair market value of an asset described in such clause. ``(ii) Clause (i) shall not be interpreted to-- ``(I) preclude the Secretary from promulgating, in accordance with section 553 of title 5, United States Code, any regulation interpreting such clause; ``(II) expand the regulatory authority of the Secretary with respect to the term `adequate consideration' beyond such authority available to the Secretary on the day before the date of enactment of the Retire through Ownership Act; or ``(III) modify a fiduciary's obligations under section 404.''. (b) Effective Date.--The amendments made by subsection (a) shall apply with respect to determinations described in section 3(18)(B) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002(18)(B)) (as added by such subsection) that are made on or after the date of enactment of this Act. The SPEAKER pro tempore. Pursuant to the rule, the gentleman from Michigan (Mr. Walberg) and the gentleman from Virginia (Mr. Scott) each will control 20 minutes. The Chair recognizes the gentleman from Michigan. general leave Mr. WALBERG. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and include extraneous material on S. 2403. The SPEAKER pro tempore. Is there objection to the request of the gentleman from Michigan? There was no objection. Mr. WALBERG. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise today in strong support of S. 2403, the Retire through Ownership Act. An employee stock ownership plan, or ESOP, is a retirement savings plan that allows employees to build wealth by owning shares in the company they work for. ESOPs often supplement, rather than replace, other retirement savings. Employee ownership gives workers a financial stake in their company's success, which can increase productivity and help build wealth. Unfortunately, for more than 50 years, the Department of Labor has not issued regulations for valuing employer stock, creating uncertainty for ESOP managers seeking to value the stock purchased and held by ESOPs. S. 2403 is a bipartisan and bicameral solution that provides clear guidelines for valuing stock purchased and held by ESOPs. It is a win- win for job creators and workers. Mr. Speaker, I urge my colleagues to vote ``yes,'' and I reserve the balance of my time. Mr. SCOTT of Virginia. Mr. Speaker, I yield myself such time as I may consume. I rise in support of S. 2403, the Retire through Ownership Act. As my colleagues know, an employee stock ownership plan, or ESOP, is a retirement plan that is designed to invest primarily in the stock of the sponsoring employer, thus providing employees with an equity stake in the company for which they work. According to the National Center for Employee Ownership, over 6,600 ESOPs in the United States currently cover 15 million participants. ESOPs can provide valuable retirement benefits to the employees. There are many examples of successful ESOPs in our districts, and ESOPs have bipartisan support in Congress. ESOPs must follow specific rules for valuing and purchasing an employer's stock to ensure that the workers are getting a fair deal. This is called adequate consideration. The term is defined in law as the fair market value of an asset as determined in good faith by the trustee or named fiduciary pursuant to the terms of the plan and in accordance with regulations promulgated by the Secretary. While there was a proposed rule to define ``adequate consideration'' in 1988, it was never finalized. Similarly, the Biden administration proposed an adequate consideration regulation in January 2025, but the Trump administration pulled it back, along with other agency regulations. In the absence of regulations, the stakeholder community is looking for further guidance from Congress on the guidelines that can be used for the valuation of employer stock. This bill, which was co-authored by my Virginia colleague, Senator Tim Kaine, permits ESOPs to rely in good faith on an independent valuation if that valuation relies on the Internal Revenue Service's longstanding guidelines on valuing the fair market value of private businesses. Last of all, the Education and Workforce Committee considered and unanimously approved the House counterpart of the bill. The Senate has already cleared S. 2403, so House passage today will send it to the President for his signature. Mr. Speaker, I urge my colleagues to support the bill, and I reserve the balance of my time. Mr. WALBERG. Mr. Speaker, I yield 3\1/2\ minutes to the gentleman from Georgia (Mr. Allen), the chairman of the Subcommittee on Health, Employment, Labor, and Pensions. Mr. ALLEN. Mr. Speaker, the Retire through Ownership Act is the Senate companion to legislation I introduced in the House. Mr. Speaker, before being elected to Congress, I founded and operated a construction business for nearly 40 years. One of the many lessons I learned over my decades-long career as a small business owner is that true success is measured by the success of your employees. One of the greatest honors of my life has been the opportunity to provide individuals with the dignity and respect that come with gainful employment and the means to save for a fulfilling retirement. This is why I have spent my time in Congress on the Education and Workforce Committee, promoting policies that empower workers and job creators to succeed in this country and ensuring the American Dream remains intact for the next generations of leaders. As chairman of the Subcommittee on Health, Employment, Labor, and Pensions, I introduced the House version of the legislation and present it for you today: the Retire through Ownership Act. As we know, many employers and hardworking Americans pursue employee stock ownership plans, or ESOPs, to increase employee ownership and to promote a secure and prosperous retirement. ESOPs build wealth for retirement and give employees an ownership stake in their employer. Unfortunately, in too many cases, these plans face unnecessary risk due to the lack of a clear regulatory framework for valuing employee stock, as has been discussed today. [[Page H5906]] {time} 1230 For more than 50 years, ever since the enactment of ERISA, ESOP fiduciaries have been waiting for guidance on how to value the employer stock that their plans purchase. However, the Department of Labor has never produced definitive guidance. Instead, DOL began a national enforcement project targeting ESOPs. Rather than tell the ESOP community how to value the stock, DOL used legal actions and settlements to guide ESOP stock purchases in a practice that stockholders call regulation by litigation. The bipartisan Retire Through Ownership Act provides valuation guidelines to ESOPs and will bring an end to over 50 years of uncertainty. This legislation is long overdue, and it is a long overdue course correction that will help ensure more Americans can pursue ESOPs and do so with confidence so they can enjoy a secure retirement. I have been proud to lead this bill during the 119th Congress, and I thank the ESOP Association for working tirelessly with my staff and me to advance this commonsense solution. Mr. Speaker, I urge all my colleagues to support the bill so we can send it to President Trump's desk for signature. Mr. SCOTT of Virginia. Mr. Speaker, I yield myself the balance of my time. Mr. Speaker, as we conclude the debate on this bill, it is important to keep in mind that in an ESOP, employees' retirement savings are largely invested in an employer stock. If the company goes out of business, the employees could lose not only their jobs but also a sizable portion of their retirement savings. It is imperative the Labor Department's Employee Benefits Security Administration, EBSA, be appropriately funded and staffed to ensure that ESOPs are complying with the law. Unfortunately, the Trump administration is doing just the opposite and proposed cutting EBSA's budget by $10 million in fiscal year 2027. That cut has been retained in the House Republicans' Labor-HHS appropriations bill. As we look to finalize the fiscal year 2027 appropriations process in the coming weeks, we should reject the cuts to EBSA whose resp

Referenced legislation: S2403, S2403