U.S. Sen. Bill Cassidy, M.D. (R-LA) introduced two pieces of legislation that he said will strengthen Employee Stock Ownership Plans (ESOPs).
The Employee Ownership Representation Act and the Employee Ownership Fairness Act will give employees more representation and investment options, Cassidy, the chair of the Senate Health, Education, Labor and Pensions Committee said. ESOPs are employee retirement plans in which stock in a company is held collectively by the company’s employees. The plans often supplement a 401k.
“ESOPs put more money in Americans’ pockets and lead to a more productive workforce,” Cassidy said. “By strengthening ESOPs, we strengthen workers and their ability to invest in their futures.”
Specifically, the Employee Ownership Representation Act would give ESOP representation by adding two board members to the Employee Retirement Income Security Act (ERISA) Advisory from the ESOP board members. This would provide employee-owned companies with advocacy on the council, Cassidy said.
The Employee Ownership Fairness Act authorizes ESOPs to contribute to 401(k) plans without exceeding their ESOP or 401(k) contribution limits. This would allow employees to invest more in their employers’ stock and save more for retirement, he said.