Jo Ann Emerson, CEO of the National Rural Electric Cooperative Association (NRECA), praised the U.S. Senate for unanimously passing the Cooperative and Small Employer Charity Pension Flexibility Act, S. 1302.
“We thank Chairman Harkin and Senator Roberts for their leadership in guiding this important legislation. And we appreciate the unanimous approval of all Senators for confirming that cooperative and non-profit pension plans pose virtually no risk of default and deserve different treatment under the Pension Protection Act. We urge the House of Representatives to consider this bill as soon as possible and send it to the President’s desk for enactment,” said Emerson.
Led by Committee Chair Tom Harkin (D-IA) and Senator Pat Roberts (R-KS), the legislation has 51 bipartisan Senate 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. The NRECA Plan, for example, has more than 880 independent, participating employers with 56,000 participants in 47 states. 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.