A bill that prevents unnecessary cost increases and funding volatility for electric cooperatives that participate in the NRECA Retirement Security Plan has unanimously passed the Senate and is headed to the House of Representatives.
The Cooperative and Small Employer Charity Pension Flexibility Act, a co-op legislative priority, cleared the Senate on Jan. 28.
NRECA and member co-ops have worked hard for the measure, which was authored by Senate Health, Education, Labor, and Pensions Committee Chairman Tom Harkin, D-Iowa, and Sen. Pat Roberts, R-Kan., with 51 co-sponsors.
S. 1302 provides co-ops and charity sponsors of “multiple-employer” pension plans like the RS Plan with a permanent exemption from the Pension Protection Act of 2006. Without the legislation, co-ops could have been forced to meet costly regulations directed toward at-risk, single-employer plans.
“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 nonprofit pension plans pose virtually no risk of default and deserve different treatment under the Pension Protection Act,” said NRECA CEO Jo Ann Emerson.
The bill also is endorsed by the Girl Scouts, United Way, Christian Schools International, National Council of Farmer Cooperatives and many other co-op and charity groups.
The Pension Protection Act changed funding procedures for many plans to protect participants and the federal Pension Benefit Guaranty Corp. in case a single-employer plan goes bankrupt.
However, the NRECA RS Plan poses virtually no risk of default, since it has more than 880 participating employers in 47 states. Congress previously granted a temporary exemption to electric co-ops, as well as some nonprofit organizations, but that is set to expire in 2017.
“By giving these employers the necessary flexibility to continue offering benefits to their workers, this legislation will bolster these businesses and help the workers and families who rely on pensions to save for retirement and the future,” Harkin said following the Senate vote.
“This bill provides a permanent solution to addresses the unique needs of rural cooperative and charity pension plans,” added Roberts.
Kirk Johnson, NRECA senior vice president, government relations, credited a grassroots push by co-ops, statewide associations and NRECA employees with helping to make a difference in the Senate.
“We have already started work in the House and hope to advance this important piece of legislation for the president’s signature,” he said.
Source: Electric Co-op Today