The Senate passed a bill Tuesday that would make it easier for charities and cooperatives to provide pension plans for employees.
Senate Health, Education, Labor and Pensions Committee Chairman Tom HarkinThomas (Tom) Richard HarkinFCC needs to help services for the deaf catch up to videoconferencing tech Biden celebrates anniversary of Americans with Disabilities Act Ex-Rep. Abby Finkenauer running for Senate in Iowa MORE (D-Iowa) introduced the Cooperative and Small Employer Charity Pension Flexibility Act, S. 1302, which would ensure that charitable and cooperative associations are not swept into the Pension Protection Act of 2006 (PPA) funding rules.
Harkin said those rules require the organizations to divert funds from critical services and jeopardize their ability to provide pension benefits to workers.
Some who will benefit from the bill include electric, agricultural and broadband cooperatives, as well as private schools, religious groups and charities.
Senate Majority Leader Harry Reid (D-Nev.) received unanimous consent to pass the bill and asked that if the House passes an identical measure, the bill would be considered passed and sent to President Obama’s desk for his signature before becoming law.
Many cooperative associations and charitable organizations are only able to provide their employees with pension plans because those organizations are able to pool their resources using the multiple employer plans. But when Congress passed PPA, cooperative and charitable pension plans were subjected to significant premium increases despite the fact that the plans pose little risk of being unable to pay the benefits. PPA was designed to protect pension participants, but lawmakers later realized the change harmed the uniquely structured plans for charities and cooperatives.
Harkin argued that the federal government should promote such pooling because pensions help provide economic security for retired employees.