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The American Rescue Plan Act of 2021 included an appropriation of $10 billion for another round of funding for the State Small Business Credit Initiative (SSBCI), a program that has been in place since 2010. SSBCI funds might make it easier for lenders to ESOPs to provide larger and less collateralized ESOP loans or for mezzanine lenders to loan at lower rates.

Every company needs a plan for replacing the chief executive, even if the CEO does not have a plan yet. But what about succession planning for other key leaders and roles? More than one cohort of the NCEO’s CEO network dug into this topic last month.

In Jander v. Retirement Plans Committee of IBM (2nd Cir. Dec.

Our recent ESOP Topics Survey gathered data from 160 ESOP companies on how they’re handling the COVID-19 crisis and other issues, including questions about their turnover rates in 2019. The surveyed ESOP companies reported dramatically lower turnover than overall national averages.

On May 5, 2021, the House Ways and Means Committee unanimously passed the SECURE Act 2.0 (H.R. 2954).The bill makes a number of changes to retirement plan law but, unlike the version introduced last year, does not include a provision allowing owners of S corporation ESOPs to get the same Section 1042 tax deferral on the sale of stock to an ESOP trust as owners of C corporation ESOPs can.

Business owners frequently choose to operate as a limited liability company (LLC) because it provides for a less formal governance structure and the option to be taxed as a partnership. But the downside for LLC owners considering an ESOP is that an ESOP must be invested primarily in “employer securities” and LLC membership interests don’t count. The solution is to convert the LLC into a corporation.

The “Employee Ownership, Empowerment, and Expansion Act” (SB0085 and HB0154) has unanimously passed authorizing committees in both houses of the Tennessee General Assembly.

H.B. 1198 passed a committee vote in the Texas House of Representatives by 12-0. The critical step now is to get it to a vote because the session ends in one month. The bill would:

Each year, the NCEO compiles a database of all ESOPs in the US. This database breaks out privately held and publicly traded ESOPs, and includes the age of the ESOP, number of participants, total plan assets, and more. We have just released the 2020 version.

The NCEO's Fall ESOP Forum was held in St. Louis last week, and we offer a huge thank-you to the people who joined us there and showed so much enthusiasm for making employee ownership thrive.