A February 3 article in Stateline, an initiative of The Pew Charitable Trusts, reports that more states are encouraging businesses to adopt an employee ownership model, citing that sharing ownership can improve pay and working conditions, reduce wealth inequality and give retiring entrepreneurs another way to pass on their companies. Although employee ownership has a history of bipartisan support, employee-owned businesses are still a rarity in the U.S. 

One such model is Employee Stock Ownership Plans (ESOPs), which are federally regulated trusts with a defined structure. Professor Sean Anderson, an expert in retirement plans, argues that ESOPs do not make sense as a form of employee ownership.

“They’re just atrociously bad as retirement plans,” he said. “They’re inherently undiversified investments.”

Read the full article at pewtrusts.org.