A bipartisan bill introduced by Rep. Earl Pomeroy, D-N.D., would help the country address the current "retirement income security crisis" that's "growing larger every day," he said Wednesday.
During a conference call with reporters, Pomeroy explained the Employee Stock Ownership Plan Promotion and Improvement Act he co-introduced Wednesday with Rep. Charles Boustany, R-La.
Pomeroy said people are living longer and spending more time in retirement, which has caused a "compelling urgency" to ensure workers have enough saved up.
The legislation would repeal penalties on ownership earnings and address tax issues that discourage businesses from converting to employee ownership plans.
Pomeroy said about 60 businesses in North Dakota would benefit from the legislation. The National Center for Employee Ownership estimates 11,000 U.S. companies with 13 million employees operate under profit sharing plans.
ADVERTISEMENT
"I have seen wonderful examples of the excitement of employees in realizing they are not just the employee, they are the owner," he said. "Individuals with fairly modest roles in the company can end up with very substantial equity stake."
Getting a stake
Employee ownership plans help address retirement issues, Pomeroy said, because workers earn a stake in their company that they can cash in instead of ending up with "just a gold watch at retirement."
Robert Wallace, CEO of AGVISE in Northwood, N.D., said his company's employee ownership plan since 1994 has helped the business weather the recession.
"We've been able to ride the cycle where we have not seen a decline at all in our account balances," he said.
Kyle Trosen, an employee in the Grand Forks branch of Fargo-based Dakota Supply Group, said "right away, I realized it was a good thing" that the company was structured to give workers an ownership in the business. They've operated under an ownership plan since 1991.
"It's neat to have something at stake in your own choices you make for retirement," he said. "Everyone's trying to do the best they can to make it a better atmosphere and earn the company more money."
Brian Becker, vice president of finance for Border States Electric, said the ownership equity that has built up for decades in his company "would have left the state and basically the country" if they hadn't given workers a stake.
ADVERTISEMENT
If the company hadn't gone to the plan in 1984, he said, it probably would have been sold to a foreign company and caused local employees to lose their jobs.
"It's really been a benefit to North Dakota and the employee owners to stay employee-owned," Becker said.
Pomeroy said employees will see work "in a whole different context" when they know their efforts will give them a stake in the company.
"You're not just doing a shift," he said. "You're advancing your career through growing the business."
Johnson reports on local politics. Reach him at (701) 780-1105; (800) 477-6572, ext. 105; or send e-mail to rjohnson@gfherald.com .
