SB 2403, the “Retire through Ownership Act,” amends the Employee Retirement Income Security Act of 1974 (ERISA) to clarify how the fair market value of certain closely held stock is determined for employee stock ownership plans (ESOPs). The bill states that an ESOP fiduciary may rely in good faith on a valuation prepared by an independent valuation expert or business appraiser, so long as that valuation uses the principles and methodologies in IRS Revenue Ruling 59-60, as updated over time by the IRS. The measure is aimed at giving fiduciaries and appraisers clearer guidance when valuing privately held company stock held by retirement plans.
The bill also limits how this clarification can be interpreted. It expressly preserves the Secretary of Labor’s ability to issue regulations interpreting the provision, does not expand the Secretary’s existing authority over the meaning of “adequate consideration,” and does not change a fiduciary’s duties under ERISA section 404. The amendment applies only to determinations made on or after the date of enactment.
Impact
If enacted, the bill would amend ERISA section 3(18) to add a specific safe-harbor-style rule for ESOP stock valuations based on independent expert appraisals using IRS Revenue Ruling 59-60. This would affect fiduciaries of employee stock ownership plans, valuation professionals, closely held businesses, and retirement plan participants by providing more explicit statutory guidance on what may count as adequate consideration for privately held stock transactions within ESOPs. It would not otherwise alter the core fiduciary obligations under ERISA or broadly expand federal regulatory authority.
Sentiment
The available record shows no committee transcript, vote tally, or recorded debate, so there is no documented partisan or stakeholder opposition in the provided materials. Based on the text alone, the bill appears to be framed as a technical clarification intended to support ESOP transactions and retirement ownership structures rather than a controversial policy change. The Senate passed the measure on October 9, 2025, suggesting at least some level of legislative support.
Contention
The main potential point of contention is whether codifying reliance on independent valuations could make it easier for fiduciaries to defend ESOP stock prices, or conversely whether it could reduce scrutiny of valuations in closely held company transactions. Another possible issue is the bill’s interaction with the Department of Labor’s interpretive authority and existing fiduciary standards under ERISA section 404, though the text explicitly says it does not expand or diminish those duties. No specific objections or supporters are identified in the provided materials.