The ESOP Association Led the Bipartisan Advocacy Campaign to Secure Its Top Legislative Priority

President Trump today signed S. 2403, the Retire Through Ownership Act, into law, the final act of a sustained bipartisan advocacy campaign led by The ESOP Association. The legislation was the Association’s top priority in the 119th Congress and provides long-awaited clarity on ESOP stock valuation to protect employee owners and encourage new ESOP formation.

“This is the most important ESOP law enacted in decades, and The ESOP Association was proud to lead the advocacy effort to get it across the finish line, working closely with leaders of both parties,” said James Bonham, President and CEO of The ESOP Association. “The Retire Through Ownership Act strengthens confidence in the valuation process for millions of employee owners and gives business owners a clearer path to an ESOP transition. Combined with the Trump administration’s pro-ESOP direction at the Department of Labor, it creates a historic opportunity to expand employee ownership in America.”

The legislation passed the U.S. Senate unanimously in October 2025 and the House by an overwhelmingly bipartisan vote of 401–14 on September 16, 2026.

The Retire Through Ownership Act clarifies how ESOP fiduciaries determine the fair market value of privately held company stock, a process essential to protecting employee owners’ retirement savings. Under the new law, fiduciaries may rely in good faith on a valuation provided by an independent valuation expert or business appraiser using the long-established principles and methodologies of IRS Revenue Ruling 59-60.

Because the Department of Labor has never issued regulations defining “adequate consideration” for privately held ESOP stock, fiduciaries have faced uncertainty and potential liability even when they acted prudently and retained qualified, independent valuation professionals. The resulting litigation, investigations, and compliance costs have affected existing ESOPs and discouraged the creation of new ones, limiting opportunities for more American workers to build real long-term wealth through ESOPs.

“On behalf of our membership, we thank the bill’s sponsors, Senators Roger Marshall and Tim Kaine and Representative Rick Allen, for championing this legislation,” Bonham continued. “We are also grateful to committee leaders, Chairmen Bill Cassidy and Tim Walberg and Ranking Members Bernie Sanders and Bobby Scott, for securing unanimous approval in their committees.”

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“This is the most important ESOP law enacted in decades, and The ESOP Association was proud to lead the advocacy effort to get it across the finish line, working closely with leaders of both parties." James Bonham, President & CEO, The ESOP Association