You may think the U.S. Senate has bigger fish to fry – uh, like healthcare reform? – but senators now have something new to consider that will be of interest to HR leaders: a bill with bipartisan support that would encourage companies to offer employee stock ownership plans.
Introduced July 12 by Sens. Gary Peters (D-Mich.) and Jim Risch (R-Idaho), the bill in part aims to give workers another way to save for retirement, according to a statement issued by Risch. ESOPs also may offer
business owners the opportunity for a comfortable exit.
Advocates for ESOPs also tout their power to inspire employee satisfaction, retention, engagement and loyalty in companies of any size. Risch says 13.5 million employees now participate in 7,000 ESOPs nationally, reaping 12.5 percent more than their peers in wages and retirement contributions.
The bill is aimed at smaller companies that may not have easy access to the expertise needed to launch an ESOP. It calls for the nonprofit business-advisory group SCORE — which operates with support from the U.S. Small Business Administration — to provide those companies the information they need.
“ESOPs are the perfect transition solution for many successful closely held companies, benefiting both employees and owners,” says Corey Rose, founder of the National Center for Employee Ownership, quoted in Risch’s statement. “But despite their many tax, planning, and legacy benefits, few owners know that this is even a possibility. The outreach program proposed in this bill would be a very cost-effective way to address this issue.”