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.
Sponsors
Roger Marshall
R-KS | Primary Sponsor
Legislative Progress
Passed SenateReported by Mr. Cassidy, with an amendment
Passed Senate (inferred from es version)
Mr. Marshall (for himself and Mr. Kaine) introduced the following …
Mr. Marshall (for himself and Mr. Kaine) introduced the following …
Summary
What This Bill Does:
This bill, called the Retire through Ownership Act, makes a small but important change to the Employee Retirement Income Security Act (ERISA). It clarifies what's considered fair value for certain company stocks in employee-owned retirement plans. The goal is to make it easier for these plans to buy or sell shares without worrying about complex valuation rules.
Who Benefits and How:
- Employee Stock Ownership Plans (ESOPs): These plans will have more clarity on how to determine the fair market value of their company's stocks. This could simplify their transactions, making it easier for employees to own a piece of the companies they work for.
- Businesses with ESOPs: They might face less risk of legal challenges related to stock valuation, which could encourage more businesses to offer employee ownership plans.
Who Bears the Burden and How:
- Plan Fiduciaries (those responsible for managing retirement plans): They'll need to understand and apply this new definition of adequate consideration. However, the bill emphasizes that it doesn't change their existing duties or expand the Secretary's regulatory authority.
- Taxpayers: While there are no direct costs mentioned in the bill, any changes to regulations could potentially lead to indirect costs or benefits for taxpayers.
Key Provisions:
- The bill amends ERISA to provide a clear definition of adequate consideration for certain closely held stock in employee stock ownership plans.
- It allows ESOP fiduciaries to rely on valuations from independent experts using IRS guidelines (Revenue Ruling 59–60).
- It ensures that this change doesn't expand the Secretary's regulatory authority or modify fiduciary obligations under section 404 of ERISA.
- The amendments apply to determinations made on or after the date the bill is enacted.
Evidence Chain:
This summary is derived from the structured analysis below. See "Detailed Analysis" for per-title beneficiaries/burden bearers with clause-level evidence links.
Primary Purpose
Amends ERISA to provide a clear definition of adequate consideration for certain closely held stock in employee stock ownership plans.
Policy Domains
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
Key Definitions
Terms defined in this bill
The short title of the bill.
A term defined under ERISA, which now allows fiduciaries to rely on independent valuations for determining fair market value of assets in employee stock ownership plans.
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology