Congress approves new pension rules for cooperative small employer charity plans

Bipartisan legislation that would establish new funding and disclosure rules for Cooperative Small Employer Charity (CSEC) plans has cleared both houses of Congress. The Cooperative and Small Employer Charity Pension Flexibility Act of 2013 (S. 1302; H.R. 4275) was approved by the Senate in January 2014 and was passed by the House on March 24, 2014. The bill is expected to be signed by the President.

This legislation would amend ERISA to establish minimum funding standards for CSEC pension plans and set rules governing contributions to CSEC plans. The bill is designed to help charities and cooperative associations by implementing pension funding rules that reflect the unique designs of their CSEC plans, rather than subjecting these plans to the funding rules of the Pension Protection Act (PPA) funding rules.

The bill “prevents charities and cooperatives from being forced to overfund their pension plans, and thus will free up more resources for these groups to continue enhancing communities across America,” said Rep. Susan Brooks (R-IN), who sponsored the legislation in the House.

Source: H.R. 4275.

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