(ARLINGTON, VA) — The National Rural Electric Cooperative Association (NRECA) welcomed the U.S. Senate Committee on Health, Education, Labor and Pensions unanimously passing the Cooperative and Small Employer Charity Pension Flexibility Act, S. 1302.
“We thank the committee for its leadership in taking this important vote confirming that cooperative and non-profit pension plans pose virtually no risk of default and deserve different treatment under the Pension Protection Act,” said Kirk Johnson, Senior Vice President of Government Relations for NRECA.
Led by Committee Chair Tom Harkin (D-IA) and Senator Pat Roberts (R-KS), the legislation now has 34 bipartisan cosponsors and 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).
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. NRECA, for instance, has more than 880 employers and 56,000 participants in 47 states, which is why S. 1302 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.