Cooperative and Small Employer Charity Pension Flexibility Act

Bill: 113-s-1302
Sponsor: Sen. Harkin, Tom [D-IA]
Introduced: 2013-07-16 in the Senate
Policy area: Labor and Employment
Subjects: Congressional oversight
Employee benefits and pensions
Government studies and investigations
Social work, volunteer service, charitable organizations

Summary:
action_date: 2013-07-16
text: 
Cooperative and Small Employer Charity Pension Flexibility Act - Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code, with respect to cooperative and small employer charity pension plans (CSEC plans), to: (1) define such plans as defined benefit plans maintained by multiple employers, all of whom are tax-exempt charitable organizations; (2) exempt CSEC plans from existing funding standards and allow such plans to establish minimum funding standards and special rules with respect to the valuation of plan assets, required contributions, and liquidity requirements; (3) require specified notices to CSEC plan participants on the effect of CSEC plan rules on plan funding and on total contributions made by participating employers; (4) allow pension plan sponsors to elect out of treatment of their plans as a CSEC plan in plan years beginning after December 31, 2013; (4) establish a flat premium level for insurance coverage of CSEC plans; and (5) require the Pension Benefit Guaranty Corporation (PBGC) to make sponsors of existing CSEC plans aware of the changes to ERISA made by this Act and the assistance available through the Participant and Plan Sponsor Advocate established by ERISA. 

action_date: 2013-10-30
text: 
Cooperative and Small Employer Charity Pension Flexibility Act - (Sec. 2) Declares that: (1) defined benefit pension plans are a cost-effective way for cooperative associations and charities to provide their employees with economic security in retirement, (2) many cooperative associations and charitable organizations are only able to provide their employees with defined benefit pension plans because those organizations are able to pool their resources using the multiple employer plan structure, and (3) the pension funding rules should encourage cooperative associations and charities to continue to provide their employees with pension benefits. 
 
(Sec. 3) Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code to define a "cooperative and small employer charity pension plan" (CSEC pension plan), for purposes of this Act, as a defined benefit pension plan: (1) to which certain provisions of the Pension Protection Act of 2006 apply; and (2) that, as of January 1, 2013, was maintained by more than one employer all of whom were tax-exempt charitable organizations. 
 
(Sec. 4) Amends ERISA and the Internal Revenue Code to establish minimum funding standards for CSEC pension plans and special rules for valuation of plan assets. 
 
Permits the Secretary of Labor to extend an amortization of any unfunded liability of a CSEC pension plan for up to 10 years if the Secretary determines that: (1) such extension would carry out the purposes of this Act and would provide adequate protection for plan participants and their beneficiaries, and (2) failure to permit such extension would result in a substantial risk to the voluntary continuation of the plan or a substantial curtailment of pension benefit levels or employee compensation. 
 
Allows a CSEC plan that uses a funding method that requires contributions in all years to maintain an alternative minimum funding standard account for any plan year.
 
Sets forth rules governing contributions to CSEC plans. Imposes a lien in favor of a CSEC plan for failure to make required contributions.
 
(Sec. 5) Requires a notice to participants in a CSEC plan to include: (1) a statement that different rules apply to CSEC plans than apply to single-employer plans; and (2) for the first 2 years beginning after December 31, 2013, a statement that, as a result of changes made by this Act, the contributions to the plan may have changed. Authorizes the Secretary to modify the model notice required by the Pension Protection Act of 2006 to include such statements.
 
Defines "applicable plan year," for purposes of this Act, as any plan year beginning after December 31, 2013, for which: (1) the plan has a funding shortfall greater than $1 million, and (2) the plan had 50 or more participants on any day during the preceding plan year. 
 
Requires annual reports for CSEC plans to include a list of participating employers and a good faith estimate of the percentage of total contributions made by such employers during the plan year. 
 
(Sec. 6) Amends ERISA and the Internal Revenue Code to allow a CSEC plan sponsor to elect not to treat such plan as a CSEC plan in plan years beginning after 2013. 
 
Amends the Pension Protection Act of 2006 to allow a pension plan sponsor an election to cease treating a plan as an eligible charity plan for plan years beginning after 2013.
 
(Sec. 7) Requires the Participant and Plan Sponsor Advocate established under ERISA to make itself available to assist CSEC plan sponsors and participants as part of its duties performed under the general supervision of the Board of Directors of the Pension Benefit Guaranty Corporation (PBGC). 
 
(Sec. 8) Makes the provisions of this Act applicable to years beginning after December 31, 2013. 

action_date: 2014-01-28
text: 
Cooperative and Small Employer Charity Pension Flexibility Act - (Sec. 2) Declares that: (1) defined benefit pension plans are a cost-effective way for cooperative associations and charities to provide their employees with economic security in retirement, (2) many cooperative associations and charitable organizations are only able to provide their employees with defined benefit pension plans because those organizations are able to pool their resources using the multiple employer plan structure, and (3) the pension funding rules should encourage cooperative associations and charities to continue to provide their employees with pension benefits. 
 
(Sec. 3) Makes this Act generally applicable to years beginning after December 31, 2013. 
 
)
Title I: Am

endments to Employee Retirement Income Security Act of 1974 and Other Provisions
 - (Sec. 101) Amends the Employee Retirement Income Security Act of 1974 (ERISA) to define a "cooperative and small employer charity pension plan" (CSEC pension plan), for purposes of this Act, as an employee pension benefit plan that is a defined benefit pension plan: (1) to which certain provisions of the Pension Protection Act of 2006 apply; or (2) that, as of June 25, 2010, was maintained by more than one employer all of whom were tax-exempt charitable organizations. 
 
(Sec. 102 Amends ERISA to establish minimum funding standards for CSEC pension plans and special rules for valuation of plan assets. 
 
Permits the Secretary of the Treasury to extend an amortization of any unfunded liability of a CSEC pension plan for up to 10 years if the Secretary determines that: (1) such extension would carry out the purposes of this Act and would provide adequate protection for plan participants and their beneficiaries, and (2) failure to permit such extension would result in a substantial risk to the voluntary continuation of the plan or a substantial curtailment of pension benefit levels or employee compensation. 
 
Allows a CSEC plan that uses a funding method that requires contributions in all years to maintain an alternative minimum funding standard account for any plan year.
 
Sets forth rules governing CSEC plan liquidity and contributions to CSEC plans. Imposes a lien in favor of a CSEC plan for failure to make required contributions.
 
Authorizes the Secretary to prescribe mortality tables to determine current liability of CSEC plans. 
 
Requires a CSEC plan sponsor to establish a written funding restoration plan within 180 days after receipt of a certification from the plan actuary that the plan is in funding restoration status for a plan year. 
(Sec. 103) Amends ERISA to allow a CSEC plan sponsor to elect not to treat such plan as a CSEC plan in plan years beginning after 2013.
 
Amends the Pension Protection Act of 2006 to allow a pension plan sponsor an election to cease treating a plan as an eligible charity plan for plan years beginning after 2013.
 
(Sec. 104) Requires a notice to participants in a CSEC plan to include: (1) a statement that different rules apply to CSEC plans than apply to single-employer plans; (2) for the first 2 years beginning after December 31, 2013, a statement that, as a result of changes made by this Act, the contributions to the plan may have changed; and (3) a statement that a CSEC plan is in funding restoration. Authorizes the Secretary to modify the model notice required by the Pension Protection Act of 2006 to include such statements. Requires the annual report for employee benefit plans required by ERISA to include a list of participating employers and a good faith estimate of the percentage of total contributions made by such employers during the plan year. 
 
(Sec. 105) Requires the Participant and Plan Sponsor Advocate established by ERISA to make itself available to assist CSEC plan sponsors and participants.
 

Title II: Amendments to Internal Revenue Code of 1986
 - Amends the Internal Revenue Code, with respect to CSEC plans, to set forth rules for such plans similar to those rules added to ERISA in title I of this Act. 


Legislative actions:
action_date: 2014-03-25
text: See also H.R. 4275.
action_date: 2014-01-29
text: Held at the desk.
action_date: 2014-01-29
text: Received in the House.
action_date: 2014-01-28
text: Message on Senate action sent to the House.
action_date: 2014-01-28
text: Passed Senate with an amendment by Unanimous Consent.
action_date: 2014-01-28
text: Passed/agreed to in Senate: Passed Senate with an amendment by Unanimous Consent.
action_date: 2014-01-28
text: The committee substitute as amended agreed to by Unanimous Consent. (text of committee substitute as amended: CR S546-554)
action_date: 2014-01-28
text: Measure laid before Senate by unanimous consent. (consideration: CR S545-554)
action_date: 2013-10-30
text: Placed on Senate Legislative Calendar under General Orders. Calendar No. 230.
action_date: 2013-10-30
text: Committee on Health, Education, Labor, and Pensions. Reported by Senator Harkin with an amendment in the nature of a substitute. Without written report.
action_date: 2013-10-30
text: Committee on Health, Education, Labor, and Pensions. Reported by Senator Harkin with an amendment in the nature of a substitute. Without written report.
action_date: 2013-10-30
text: Committee on Health, Education, Labor, and Pensions. Ordered to be reported with an amendment in the nature of a substitute favorably.
action_date: 2013-07-16
text: Committee on Health, Education, Labor, and Pensions. Hearings held.
action_date: 2013-07-16
text: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
action_date: 2013-07-16
text: Introduced in Senate