Bill Introduced to Help Small Businesses Offer ESOPs

It would provide $500 million in support of employee stock ownership plan (ESOP) programs and would operate through the Small Business Administration.

Senator Kirsten Gillibrand (D-New York) has introduced S. 2786, the Main Street Employee Ownership Act of 2018.

The preamble says it is a bill “To expand opportunities to available employee-owned business concerns through Small Business Administration loan programs, and for other purposes.” The bill would amend Section 7(a) of the Small Business Act, expanding loans to small business employers for the purpose of transferring ownership of the company to employees.

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It would provide $500 million in support of employee stock ownership plan (ESOP) programs and would operate through the Small Business Administration.

The ESOP Association praised Gillibrand for introducing the bill. According to the Association, she toured three employee-owned companies that are ESOP Association corporate members and said, “Employee-owned businesses have a strong track record of better pay and retirement benefits for workers and a commitment to creating local jobs. I will continue to fight as hard as I can in the Senate to pass my bipartisan legislation that rewards work and supports employee ownership around New York and the country.”

New Plan From OneAmerica Offers Participants Guaranteed Lifetime Income

“OnePension is a good fit at the workplace for plan sponsors wanting to provide participants an annuity (guaranteed lifetime income) to ensure that employees, once their working career is finished, have retirement income,” says Pete Welsh, vice president and managing principal, OneAmerica Retirement Services.

OneAmerica unveiled a type of profit-sharing retirement plan design that leverages its company legacy by allowing participants to annuitize their account balances when they retire, providing them with the option of guaranteed income for life.

Known as OnePension, this plan design helps satisfy the industry demand for guaranteed lifetime income. It also removes the administrative hassles, costs, and inflexibility associated with a traditional defined benefit (DB) plan.

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“In their heyday, DB plans were how businesses and organizations addressed the desire to provide guaranteed lifetime income to the workforce,” says Pete Welsh, vice president and managing principal, OneAmerica Retirement Services. “We’ve figured out a way to refresh a time-tested concept to fit the defined contribution (DC)-centric world in which we live, while at the same time providing maximum flexibility for the employer and the adviser.”

OnePension is different than an in-plan guaranteed lifetime income fund—which OneAmerica says is laden with uncertainty and additional fiduciary risk—and different than a variable annuity. OnePension is a qualified plan, so it allows retirement plan sponsors to invest on behalf of participants.

“OnePension is a good fit at the workplace for plan sponsors wanting to provide participants an annuity (guaranteed lifetime income) to ensure that employees, once their working career is finished, have retirement income,” says Welsh.

Welsh recommends that any interested retirement plan sponsor contact its OneAmerica representative to learn more about how it and its employees can have guaranteed income for life.

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