The Department of the Treasury and the Internal Revenue Service released new guidance that is “designed to expand the use of income annuities in 401(k) plans.”
WASHINGTON, April 9 -- Rep. Susan Brooks, R-Ind. (5th CD), issued the following news release:
Legislation introduced by Congresswoman Susan W. Brooks (R-IN5) freeing charitable and cooperative associations from burdensome federal pension requirements was signed into law by President Obama yesterday evening. House Resolution 4275 - the Cooperative and Small Employer Charity Pension Flexibility Act - will benefit more than 1,500 Hoosiers working for several nonprofit employers.
"This bipartisan pension reform ensures our rural electric cooperatives, private schools and organizations like the Girl Scouts of Central Indiana can continue to meet the needs of the communities they serve," Brooks said. "I'm proud to have introduced legislation freeing these groups from burdensome federal pension requirements that fail to recognize the unique structure in which they operate. By making sure they are not forced to overfund their plans, we are preserving their ability to continue enhancing communities across the nation. I'm encouraged elected officials from both sides of the aisle listened to the concerns of local community organizations and worked together to make this happen."
The legislation ensures that charitable and cooperative associations using multiple employer pension plans are not swept into the Pension Protection Act of 2006 (PPA) funding rules. These rules would require certain charitable and cooperative associations to fund their pension plans at levels commonly associated with high risk plans even though plans operated by these groups contain virtually no risk of default. Charitable and cooperative associations received a temporary exemption from the rules in 2006, which was set to expire in 2017. The legislation makes this exemption permanent but also allows organizations the chance to opt in to the PPA if they choose.
Rep. Brooks introduced the legislation after listening to the concerns of both local and national organizations impacted by the rules. Without action by Congress, too many cooperative and small employer charities may have been forced to reduce their services to the public and even eliminate their pension plans for employees.
"We are so grateful to Congresswoman Brooks for her tireless work on behalf of the thousands of girls who benefit from the Girl Scout Leadership Experience and our staff members who guide them," Girl Scouts of Central Indiana Chief Executive Officer Deborah Hearn Smith said. "This pension reform effort is critical to the future of organizations like Girl Scouts of Central Indiana and we're extremely excited to learn of this positive news."
"This finishes the job Congress started in 2006," Scott Bowers of the Indiana Statewide Association of Rural Electric Cooperatives said. "PPA didn't make sense for rural co-op plans like ours then, and still doesn't make sense now. Congresswoman Brooks understands our unique business model and pension plan design and we thank her on behalf of more than 1,500 Hoosiers who will benefit from this effort. Her bill recognizes our plans pose virtually no risk of default, and should be treated that way permanently."
The legislation actually reduces the deficit by $254 million and has been endorsed by the following groups:
* Christian Schools International
* The Jewish Federations of North America
* United Way Worldwide
* National Rural Electric Cooperative Association
* Girl Scouts of the USA
* National Council of Farmer Cooperatives
* United Jewish Appeal - Federation of New York, Inc.
* Hawkeye Insurance Association
* NTCA - The Rural Broadband Association
* United Benefits Group
* Lincoln Center for the Performing Arts
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