Us Congress Senate Bill SB2403

Us Congress 2025-2026 Regular Session

• Introduced: 7/23/25
• Refer: 7/23/25
• Report Pass: 7/30/25

Caption

Retire through Ownership Act

Impact

The proposed amendments to ERISA are designed to facilitate the valuation process for closely held stock, potentially encouraging more employees to participate in ownership programs. By enabling fiduciaries to use recognized methodologies such as the IRS Revenue Ruling 59–60, the legislation seeks to standardize practices in determining fair market value. This could simplify compliance for businesses and empower employees through greater ownership stakes, aligning with broader efforts to promote retirement savings through ownership structures.

Summary

SB2403, known as the 'Retire through Ownership Act', aims to amend the Employee Retirement Income Security Act of 1974 (ERISA) to provide a clearer definition of adequate consideration for closely held stock. The central focus of the bill is to aid fiduciaries of employee stock ownership plans (ESOPs) by allowing them to rely on established IRS guidelines when valuing stock. This change is anticipated to provide greater clarity and stability within the realm of employee ownership, promoting a more favorable environment for businesses looking to adopt ESOPs.

Contention

While the bill has garnered support for its potential economic benefits, including job creation and enhanced employee motivation through ownership, there are notable points of contention. Critics may raise concerns about the adequacy of the IRS guidelines and whether they fully capture the nuances of closely held business valuations. There is also apprehension that the bill might inadvertently favor larger companies over smaller businesses in terms of accessibility to employee ownership frameworks, which detractors argue could dilute its intended purpose of promoting equitable employee ownership.