A bill designed to protect the electric cooperative pension plan from overregulation and unstable funding requirements is headed for President Obama’s signature.
The House of Representatives approved the Cooperative and Small Employer Charity Pension Flexibility Act March 24 on a voice vote.
It permanently exempts not-for-profit sponsors of multiple-employer pension plans, like the NRECA Retirement Security Plan, from costly and unpredictable provisions of the 2006 Pension Protection Act.
Reps. Susan Brooks, R-Ind., and Ron Kind, D-Wis., sponsored the House legislation, H.R. 4275. It is identical to a bill that cleared the Senate Jan. 28 and was sponsored by Sens. Tom Harkin, D-Iowa, and Pat Roberts, R-Kan.
“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,” said NRECA CEO Jo Ann Emerson.
“Both the House and Senate have now confirmed that cooperative and nonprofit 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,” she said.
The 2006 law changed funding procedures for pension plans to protect participants and the federal Pension Benefit Guaranty Corp. against default.
Co-ops consistently made the case that the act’s approach was directed at larger, riskier, single-employer plans, and could add substantial fluctuations to the amount of money co-ops would set aside to meet the terms of the law.
The RS Plan presents virtually no risk of default because it has 880 participating employers spread across 47 states.
Congress provided a temporary exemption from the 2006 law to co-ops, and later extended the treatment to charitable groups such as the Girl Scouts, United Way and Christian Schools International. The new law makes the exemption permanent, as it was set to expire in 2017.
Kirk Johnson, NRECA senior vice president of government relations, said passage of the law made so much sense that it passed a divided Congress deadlocked on a range of other issues.
“Electric co-ops across the country, statewide associations and NRECA employees have helped this bill on its way to becoming law by contacting their elected officials and explaining its importance,” he said.
The Congressional Budget Office projected that the legislation will reduce the deficit by $194 million during the next 10 years.’
Source: Electric Co-Op Today