Compliance August 15, 2018

Pro-ESOP Bill Signed Into Law

Among other things, the Main Street Employee Ownership Act focuses on increasing the role of the Small Business Administration (SBA) in facilitating ESOPs by allowing the SBA to make loans to companies that they can then reloan to ESOPs.

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A bill that will make it easier for companies to establish an employee stock ownership plan (ESOP) was signed into law by President Donald Trump.

Among other things, the Main Street Employee Ownership Act focuses on increasing the role of the Small Business Administration (SBA) in facilitating ESOPs by allowing the SBA to make loans to companies that they can then reloan to ESOPs. It also allows ESOP loans to be made under the SBA’s preferred lender program and updates the definition of ESOPs so that they do not have to have full voting rights to qualify.

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“This law will help organizations better understand how to pursue a strategy of shared capitalism—something that our country’s founders agreed was vital to the health of our nation,” said ESOP Association President J. Michael Keeling in a statement. “As businesses become more aware of employee ownership’s advantages—which include higher corporate performance, a share in the rewards for employees, and a retirement plan that often outperforms other alternatives—it is easy to see employee ownership increasing.”
Investing August 15, 2018

Investors Consider Fund Fees, Performance When Making Purchases

Forty percent say information about fund fees is “very important” when selecting a mutual fund, ICI found in a survey.

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Mutual fund investors on the whole are very savvy about fees, according to a survey by the Investment Company Institute (ICI). Based on data collected in mid-2017, ICI says 90% of mutual fund-owning households consider the fees and expenses of a fund, with 40% indicating that this information is “very important.”

Additionally, 90% of mutual fund-owning households consider the historical performance of a fund, with 50% saying this information is “very important.” Seventy-eight percent consider a fund’s performance compared to an index, with 35% saying this is “very important.”

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Furthermore, 90% consider the fund’s investment objective as well as the risk level of the fund’s investments. Thirty-six percent say that each of these measures is “very important.”

“Mutual fund-owning households review many factors when choosing mutual funds to help them achieve their investment objectives, such as the fund’s fees and expenses, the historical performance of the fund and the risk level of the fund’s investments,” says Sarah Holden, senior director of retirement and investor research at the ICI. “By carefully considering these aspects of a fund, they are able to make informed choices and save and invest to meet their future financial goals.”

ICI conducted the telephone survey of 5,000 households from May to July 2017.

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