Sponsors (2)
The bill gives ESOP fiduciaries clearer, usable appraisal standards that can reduce disputes and speed transactions, at the cost of increased risk of lower valuation scrutiny (and potential overvaluation) and lingering uncertainty for past transactions until regulators act.
Plan fiduciaries and ESOP administrators: can rely on independent appraisals using IRS Rev. Rul. 59-60 methods, reducing litigation risk and giving administrators clearer defenses in valuation disputes.
Middle-class families with ESOPs and financial institutions: clearer acceptable valuation methodologies speed transactions and plan operations by reducing ambiguity about valuation standards.
Taxpayers and plan participants: preserves the Secretary of Labor's rulemaking authority and retains ERISA section 404 fiduciary duties, maintaining regulatory oversight and a government backstop.
Middle-class families and taxpayers: permitting reliance on 59-60 appraisals could lower independent scrutiny of valuations and increase the risk that private company shares paid from retirement plans are overvalued.
Financial institutions and government contractors: clarifying reliance standards may shift disputes to regulatory interpretation and create uncertainty until the Department of Labor issues implementing regulations.
Middle-class families with past ESOP transactions: applying the rule only prospectively leaves earlier valuations subject to existing uncertainty or litigation, offering no retroactive relief.
Based on analysis of 2 sections of legislative text.
Clarifies ESOP fiduciaries may rely in good faith on independent valuations using IRS Rev. Rul. 59–60 principles for fair market value determinations, while preserving DOL authority and fiduciary duties.
Amends the ERISA definition of ‘‘fiduciary’’ to add a provision allowing an ESOP fiduciary to rely in good faith on a valuation prepared by an independent valuation expert or business appraiser who used the valuation principles of IRS Revenue Ruling 59–60 when determining fair market value for certain ESOP transactions. The change reorganizes internal clause numbering to insert the new reliance rule, and it explicitly preserves the Secretary of Labor’s rulemaking authority and existing fiduciary duties. The rule applies to determinations made on or after the date of enactment.
Official title: Amend the Employee Retirement Income Security Act of 1974 to provide a clear definition of adequate consideration for certain closely held stock, and for other purposes.
Introduced July 23, 2025 by Roger Wayne Marshall · Last progress September 16, 2026