The Principal Brings Main Street to Capitol Hill
Retirees to tell Congress how employee stock ownership changed their lives
September 20, 2010 (Des Moines, Iowa) - Retirees from across the country are converging on Capitol Hill this week with a message for Congress: protect employee-owned companies because they have provided more security through substantial retirement savings.
The retirees, along with their former employers and current employee-owners, are attending the Employee-Owned S Corporations of America/Foundation for Private Employee Ownership annual Federal Policy Conference, September 21 - 23. Their mission is to educate members of Congress about how companies with Employee Stock Ownership Plans (ESOPs)—particularly S-corporation ESOPs (S ESOPs)—tend to perform better and can provide more retirement security for employees.
The Principal Financial Group®, the number one record keeper of ESOPs in the nation , is the anchor sponsor of the conference. Congress permitted ESOPs to adopt the S-corporation structure in 1998 to encourage more employee ownership.
“In an ESOP company, the employee-owners share in the capital growth of the company,” said Pete Prodoehl, vice president of retirement and investor services at The Principal®. “The ESOP culture motivates workers to be more productive and achieve higher profits because employee-owners see a direct link between their job performance and their retirement savings account balance.”
Conference attendees are encouraging members of Congress to continue to protect the S ESOP structure, especially during a time when America is rebuilding.
“Evidence abounds that ESOPs perform better by creating more jobs and revenue growth, and giving employees a bigger edge on retirement savings—even during the economic downturn,” said Prodoehl. “Interest in ESOPs is growing with credit markets opening up and hundreds of thousands of baby boomer owners looking for ways to gradually transition their business. ESOPs allow them to exit on their own schedule and also help keep homegrown businesses open on Main Street.”
A recent Georgetown University/McDonough School of Business study found that during 2008—the first year of the recession—S ESOP companies:
- Increased contributions to retirement accounts by more than 18 percent while other U.S. companies increased by only 2.8%
- Enjoyed increased employment by 2 percent while overall U.S. private employment fell in 2008 by nearly 3 percent
- Grew wages by nearly 6 percent while overall U.S. earnings per worker grew only half that much
About the Employee Owned S Corporation of America (ESCA)
ESCA is the Washington, DC voice for employee-owned S corporations, whose exclusive mission is to preserve and protect S ESOPs and the benefits they provide to the employees who own them. ESCA provides the vehicle and the voice for telling federal policymakers about the tremendous success of the S ESOP structure in generating retirement savings for working Americans and their families.
About the Principal Financial Group
The Principal Financial Group® (The Principal®) is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance, and banking through its diverse family of financial services companies. A member of the Fortune 500, the Principal Financial Group has $284.7 billion in assets under management and serves some 18.9 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.
t10090302eh – 09/2010
- National Center for Employee Ownership 2008.
- Georgetown University/McDonough School of Business—March 2010.
- The Principal Financial Group and The Principal are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
- As of June 30, 2010.