Shorr Packaging Corp. (“Shorr”) participated in lobbying efforts, simultaneously with the 42nd Annual ESOP Association National Conference in Washington, DC, to support the bi-partisan Pro-ESOP Bills H.R.2258 and S.177 – Promotion and Expansion of Private Employee Ownership Act of 2019.
Shorr representatives, Kevin Vrba (Chief Financial Officer) and Kim Stone (Financial Planning & Analysis Manager), joined other representatives from Illinois ESOP Companies and members from the Illinois ESOP Association’s Legislative Committee to meet with the offices of Illinois Senator Dick Durbin and Illinois Representatives Sean Casten (IL-6), Raja Krishnamoorthi (IL-8), Bill Foster (IL-11), and Lauren Underwood (IL-14) to discuss the importance of ESOPs and the impacts they directly have on employee-owners. They also reviewed current ESOP legislation in hopes of gaining further support. In addition to lobbying efforts, Shorr took the opportunity to network with other Illinois ESOP employee-owners and gain insight into how others promote and integrate ESOPs within their company. Employee-owners at ESOP Companies in Illinois total over 12,100 individuals, spanning across 50 companies either headquartered or having a presence in Illinois.
“The proposed legislation would greatly benefit both current and potential new ESOPS,” notes Kevin Vrba. “It’s proven that ESOP companies generally show higher productivity, profitability, and job stability and growth when compared to non-ESOP companies. As a result, ESOPs serve as a powerful retirement vehicle as account balances in these plans typically show a higher return than the average 401(k).”
Kansas Senator Pat Roberts (R) and Maryland Senator Benjamin Cardin (D) introduced S.177 in January 2019. The bill currently has 29 cosponsors – 13R/14D/2I. In addition, Washington Representative Ron Kind (D) and Missouri Representative Jason Smith (R) introduced H.R. 2258 in April 2019. This bill currently has 20 cosponsors – 10R/10D. Overall the bills include provisions that will help expand financial opportunities and provide technical assistance for companies that may be interested in forming an S Corporation ESOP. Further, the bills would ensure that small businesses adopting ESOPs retain their Small Business Administration 8(a) preference when competing for government contracts at all levels and also help equalize the treatment of S and C Corporation stock under IRC Section 1042(c)(1) by allowing the deferral of capital gains from the sale of S Corporation stock, similar to the treatment for C Corporations. Overall, these companion bills encourage the establishment of S corporation ESOPs, thus promoting retirement security and employee ownership.
“Unfortunately, nearly 46% of hard-working Americans have no employer-sponsored retirement savings plan and more than 55% of Americans over the age of 55 have no retirement savings,” stated Kim Stone. “At Shorr, all ESOP participants have a wholly funded plan available to them, with no personal out of pocket contributions. Our ESOP has proven to be one of the best decisions made to help build a significant retirement benefit for all of our employee-owners and Shorr is fortunate to have the ability to offer this phenomenal benefit to its employees.”