(ARLINGTON, VA.) — Jo Ann Emerson, CEO of the National Rural Electric Cooperative Association (NRECA), praised the U.S. House for passing the Cooperative and Small Employer Charity Pension Flexibility Act, H.R. 4275. The legislation will go to the President for enactment, since the Senate unanimously passed identical legislation on January 28 as S. 1302.
“On behalf of the thousands of employees working at not-for-profit local electric cooperatives, we thank Reps. Brooks and Kind and both Republican and Democratic House Leadership for their commitment to guiding this important legislation through the House today. 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 under the Pension Protection Act. We look forward to the President signing this bill into law,” said Emerson.
The legislation makes permanent a temporary exemption for rural cooperative “multiple-employer” defined benefit plans and similar plans for other not-for-profit organizations from the Pension Protection Act (PPA). Passage of the pension bill was led by Reps. Susan Brooks (R-Ind.) and Ron Kind (D-Wis.) in the House, and Senator Tom Harkin (D-Iowa), chair of the Senate Health, Education, Labor and Pensions (HELP) Committee, and Senator Pat Roberts (R-Kan.), a senior member of the HELP Committee and ranking member of the Senate Rules Committee.
PPA’s “single-employer” plan rules are designed specifically to protect the Pension Benefit Guaranty Corporation (PBGC) in case a single employer maintaining a plan goes bankrupt. Rural cooperative “multiple-employer” defined benefit plans have a completely different risk profile. The NRECA Plan, for example, has more than 880 independent, participating employers with 56,000 participants in 47 states. H.R. 4275 / S. 1302 recognizes the low risk posed by these plans and resolves this inequity permanently.
The National Rural Electric Cooperative Association is the national service organization that represents the nation’s more than 900 private, not-for-profit, consumer-owned electric cooperatives, which provide service to 42 million people in 47 states.