The House of Representatives has passed a bill that will make it easier for charities and cooperatives to continue to pool pension plans for their employees.
The House unanimously voted on Monday to pass the Cooperative and Small Employer Charity Pension Flexibility Act of 2013, which will now go to the desk of President Barack Obama. The Senate passed the bill in January.
The act codifies a temporary exemption of the Pension Protection Act of 2006 that allows charities and cooperative associations to form multiple employer pension plans known as CSEC plans.
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If lawmakers had allowed the exemption to expire, those plans would have had to comply with PPA funding rules designed for large single-employer plans, which could have dramatically increased their required contributions.
The rural cooperative plans "have a completely different risk profile," Jo Ann Emerson, CEO of the National Rural Electric Cooperative Association in Arlington, Va., said in a statement.
"Both the House and Senate have now confirmed that cooperative and non-profit pension plans pose virtually no risk of default and deserve different treatment."
The bipartisan legislation was authored by Republican Sen. Pat Roberts of Kansas and Democratic Sen. Tom Harkin of Iowa. Roberts is a senior member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, while Harkin is Chairman of the Committee.
"I am glad the House and Senate have acted swiftly to pass this common sense protection for rural cooperatives," Roberts said Monday in a news release, adding:
"I look forward to the president signing into law our bill which recognizes these unique plan structures by creating greater flexibility that enables employers to offer stable futures for their workers without passing the cost on to rural communities through increased costs for services."
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