Jessup, MD -- At a headquarters visit today at Baltimore Aircoil Company (BAC), over 150 of the company’s employee-owners gathered to tell U.S. Rep. Ben Cardin (D-MD) that his 2001 pension legislation translated into substantial retirement savings for BAC employees.   BAC is the world’s largest manufacturer of factory assembled evaporative cooling, thermal storage, and heat transfer equipment.  The company is 100 percent owned by an employee stock ownership plan, or “ESOP.”

“We are delighted to be able to convey in person to Congressman Cardin that the retirement savings our employees have accumulated in their ESOP accounts, and the ability of BAC employees to retire with security and dignity, is in large part attributable to Congressman Cardin’s leadership in Congress,” said Steven Duerwachter, BAC President.  

Rep. Cardin has represented Maryland’s Third Congressional District in the House of Representatives since 1987.  He is a senior member on the prestigious, tax-writing Ways and Means Committee and has been active in Congressional pension reforms.  In 2001, he was the lead Democrat on pension legislation that allowed employees to amass greater retirement savings.  Included in that measure, at the urging of the Employee-Owned S Corporations of America, was language to preserve broad-based employee ownership in private S corporations, including BAC.  As a result of the so-called “Portman-Cardin Bill,” S corporation ESOP businesses have proliferated around the nation, noted ESCA President Stephanie Silverman, and hundreds of thousands of American workers have become owners of their S corporation companies.

The economic impact of private employee ownership has been remarkable in that time.  According to a recent study by the National Center for Employee Ownership (“NCEO”), employee-owners of S corporation ESOP companies:

• Have account balances three to five times higher than the U.S. average for 401(k) plans;

• Have even higher account balances – five to seven times the average for 401(k) plans – when measured among employee-owners nearing retirement age; and

• Quit at a rate of half the national average, and are fired/laid off two-thirds less frequently, than workers in other comparable companies.

The study determined that two factors account for these results:  First, these S ESOP companies make significant annual contributions to their employees’ ESOP accounts, and second, the stock of the companies themselves has done well, with the stock values of S corporation ESOP companies outpacing the stock market by a factor of four to nine times over the past five years. 

Said BAC’s Duerwachter, “Congressman Cardin recognized that giving employees a ‘piece of the rock’ would help them build wealth through their ESOP retirement savings.  Companies like BAC, and the employees who own them, have been fortunate to have Mr. Cardin watching out for our interests in Washington.  His vision and leadership have clearly paid off for all of us, and no doubt for countless other workers in our region.”

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