Sponsors (5)
Introduced September 8, 2025 by Rick W. Allen · Last progress September 8, 2025
The bill makes ESOP valuation and transactions easier and less litigation-prone for sellers and plan sponsors by endorsing IRS valuation guidance, but at the risk of weaker enforcement and higher costs to employees and participants if valuations favor sellers.
ESOP trustees, employers, and small-business owners: can rely on IRS Rev. Rul. 59-60 for independent company valuations, which reduces litigation risk and can lower transaction costs and streamline ESOP transactions.
Plan participants and taxpayers: the bill explicitly allows fiduciaries to rely on qualified valuations while preserving ERISA §404 fiduciary duties in statute, which keeps participant protections on the books (in theory).
ESOP participants and employees: valuations that adopt IRS 59-60 methods may favor sellers and produce higher purchase prices, which can deplete plan assets and increase costs or reduce benefits for participants.
Plan participants and taxpayers: courts’ deference to good‑faith reliance on prescribed valuation methods may limit Department of Labor oversight and make it harder for participants to challenge unfair or subjective valuations.
Based on analysis of 2 sections of legislative text.
Permits ESOP fiduciaries to rely in good faith on independent valuations using IRS Revenue Ruling 59-60 methods to determine fair market value, while preserving DOL authority and ERISA duties.
Amends ERISA's definition of “adequate consideration” to allow fiduciaries of employee stock ownership plans (ESOPs) to rely in good faith on independent valuation experts or business appraisers who use the valuation principles and methods in IRS Revenue Ruling 59-60 when determining fair market value. The change preserves the Department of Labor’s rulemaking authority and does not alter fiduciary duties under ERISA §404; it applies to valuations made on or after enactment.