Helping Small Business Employees Save for Their Golden Years
Ohio Entrepreneurs Share their Success Stories
WASHINGTON – Days before National Small Business Week, members of Ohio’s small business community stressed to lawmakers the importance of protecting and strengthening a plan used by many small companies to help their employees save for retirement.
"With National Small Business Week right around the corner, we must do all we can to support America’s 28 million small businesses which are responsible for seven out of every ten new jobs created," said House Small Business Committee Chairman Steve Chabot (R-OH). "As part of that effort, I believe small companies in my home state of Ohio have an important story to tell about what has worked so well for them. In many ways, Ohio’s small businesses can serve as a model for small businesses nationwide."
“Our country was founded on the idea that free markets and free enterprise provide the best economic compass for a free people,” observed Chabot. “At the heart of this idea is the relationship between employers, their employees and the customers they serve. Too often, government red tape and our broken tax code interfere with this relationship, doing a disservice to all involved.”
BIPARTISAN PUSH TO STRENGTHEN
A major focus of today’s House Small Business Committee hearing was H.R. 2096, the Promotion and Expansion of Private Employee Ownership Act of 2015, bipartisan legislation to preserve and strengthen employee stock ownership programs (ESOPs).
“Our economy works best when America’s entrepreneurs are free to make their own decisions, take their own risks and run their businesses as they see fit. That is exactly what employee stock ownership programs – or ESOPs – do.” Chabot added.
“In 1990 the Messer employees were able to buy their future from the Messer family, using the ESOP structure,” testified Peter Strange, the Chairman Emeritus of Messer Inc. “I led the employee group through those negotiations, so I can tell you first hand that we employees could not have purchased the company if not for the important tax advantages that the ESOP model afforded us.”
“Our country's investment in ESOPs allowed ninety-nine Messer employees to purchase our future; and the engagement that opportunity created has resulted in growth,” Strange added.
“ESOP companies are 25% more likely to stay in business than non-ESOPs,” said Jay Hardy, the President of Hardy Diagnostics who testified on behalf of the Warren County, Ohio Chamber Alliance, citing recent studies. “Employee Owners have 2.5 times more money in their retirement accounts than non-ESOP employees.”
Hardy said that his company has grown by 78 percent since becoming an ESOP in 2012. In his written testimony, he also relayed statements from his employees about how important ESOPs have been to them personally.
“When you are both an employee and an owner you can really affect the bottom line for yourself and the company,” said Steve Smith, a Supervisor for the Ohio Distribution Center of Hardy Diagnostics, in written testimony.
“Being a partner in the business means lots more than just getting a paycheck. Anything I can do to help, improve or solve a problem directly affects my business partners and my family. In looking ahead to my retirement, I will see the difference that our individual contributions have made. It feels great to be in a successful partnership,” added Allen Millikan, a Maintenance Technician for Hardy Diagnostics.