S. 2403 explained · 119th Congress · Pending in Congress
Retire through Ownership Act
Cosponsors: 1 (1 D, 0 R) · per Congress.gov, 2026-10-10
Introduced: 2025-07-23
Latest action (2025-10-17): Held at the desk.
What S. 2403 does, in plain terms
Retire through Ownership Act This bill allows the fiduciary of an Employee Stock Ownership Plan (ESOP) to rely on a valuation provided by an independent valuation expert or business appraiser in determining the fair market value of the plan's securities if the securities are not traded on a national securities exchange (i.e., not publicly traded) and the expert or appraiser follows specified methodologies. In general, ESOPs are defined contribution pension plans where employees accrue shares of their employers' stock in individual accounts as part of their compensation. After separating from employment or retiring, employees receive the cash value of their shares. Under the bill, an independent expert or appraiser must adhere to the methodology established under the Internal Revenue Service Ruling 59-60, which prescribes the factors a professional business appraiser should consider in forming a valuation of the stock for a closely held business.
Official summary by the Congressional Research Service, via Congress.gov.
Constitution Index
“VFA Constitution grade”
Constitutionally sound
Graded 2026-10-09
SI-generated grade · five published checks · not individually reviewed by a person · methodology
The Retire through Ownership Act is fully constitutional. It operates within Congress's enumerated power to regulate pension plans under the Commerce Clause, does not infringe any Bill of Rights protections, respects individual sovereignty by expanding voluntary employee ownership options, passes all four decentralization tests by leaving implementation to private parties and states, and provides clear due process protections through independent valuation standards.
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✓ Passes · Enumerated powers
Congress has explicit authority under Article I, Section 8, Clause 3 (Commerce Clause) to regulate employee benefit plans like ESOPs, which are inherently economic activities affecting interstate commerce. The bill merely clarifies fiduciary standards for plan valuations, staying well within the scope of ERISA and the Internal Revenue Code. -
✓ Passes · Bill of Rights
The bill does not restrict speech, religion, assembly, press, petition, arms, quartering, search and seizure, self-incrimination, due process, takings, trial rights, jury rights, cruel and unusual punishment, unenumerated rights, or reserved powers. It imposes no government action that would trigger Bill of Rights scrutiny. -
✓ Passes · Individual sovereignty
The bill expands individual freedom by allowing employees to own shares in their employer through ESOPs. It does not restrict any person's use of their person, property, speech, labor, or belief. The government bears no burden to justify a restriction because none exists. -
✓ Passes · Decentralization
The bill passes all four decentralization questions: (1) individuals and families can handle retirement planning without government, but this bill merely facilitates a voluntary option; (2) local communities and counties could handle ESOP regulation without state involvement; (3) states could handle this without federal involvement, but federal uniformity in pension law is a legitimate exercise of… -
✓ Passes · Due process and takings
The bill enhances due process by requiring independent valuation experts to follow IRS Revenue Ruling 59-60 methodology, ensuring fair notice and non-arbitrary valuation standards. It does not take any property without just compensation; it merely clarifies how fiduciaries may determine fair market value for ESOP transactions.
Sources: Congress.gov: S 2403 summary
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