New Analysis Reveals Exceptional Retirement Savings and Job Security for Employee-Owners

WASHINGTON, April 27, 2022 /PRNewswire/ — New analysis from Ernst & Young (EY) finds that employee owners of privately-owned companies called “S corporations” (S ESOPs) enjoy significantly better retirement savings and better job security. job than other American workers.

The analysis – which EY conducted on behalf of Employee-Owned S Corporations of America (ESCA) – examines trends in S ESOP retirement plans from 2002 to 2019, including the net asset value of S ESOP plans , number of participants, average account balances, and distributions to participants.

Key findings from EY include:

  • ESOP assets and participants has increased considerably since the beginning of the millennium, and assets grew faster than participants, resulting in higher assets per participant.
  • S ESOP employee-owners have seen feedback at rates above those of the stock market.
  • S ESOP distributions to employee-owners, usually upon retirement, totaled more than $77 billion from 2002-2019.
  • An individual employee-owner participating in an S ESOP earns close to $26,000 each year as an added benefit. This figure takes into account corporate contributions, increased job security, and growth in S ESOP assets.

“Time and time again, the data shows that the S ESOP model delivers substantial additional benefits to hard-working Americans who can own their businesses,” said Stephanie Silverman, CEO of ESCA. “Whether accumulating significant savings for retirement or enjoying exceptional job security, etc., private company employee ownership has a proven track record in helping workers and American businesses to thrive, even in the harshest climates.”

At a time when financial stability and retirement security are top of mind for Americans, Silverman added, “our elected leaders should seize the opportunity to encourage the creation of more S ESOP companies. The US House took a useful step in this direction by including a partial incentive for business owners to transition to employee ownership in the bipartisan SECURE Act, aimed at increasing retirement savings, which was passed with bipartisan support crushing last month.We hope the US Senate will include a similar incentive in its own bipartisan retirement savings legislation.

EY’s findings are based on a growing body of data and research demonstrating the valuable benefits of employee ownership for American workers and businesses.

A recent study by the National Center for Employee Ownership (NCEO) found that employee ownership of private companies through employee stock ownership plans (ESOPs) has provided exceptional resilience and financial security in the face of pandemic-related economic challenges. In its reporting on the study, NBC News noted that while record numbers of Americans quit their jobs in what has been dubbed the “great quit,” workers at private, employee-owned companies “remain on the spot and reaping the rewards” in stark contrast to the “deep disaffection of workers” in many traditional companies.

A 2021 survey by John Zogby Strategies also found that workers at employee-owned S corporations (S ESOPs) said they were on much more stable financial ground than other American workers during the COVID-19 pandemic.

  • To read EY’s full findings, CLICK HERE.
  • To learn more about Employee-Owned S Corporations of America (ESCA), CLICK HERE.

SOURCE S Corporations of America employee-owned

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