S.1302 - Cooperative and Small Employer Charity Pension Flexibility Act113th Congress (2013-2014)
Summary: S.1302 — 113th Congress (2013-2014)
Reported to Senate amended (10/30/2013)
Cooperative and Small Employer Charity Pension Flexibility Act - (Sec. 2) Declares that: (1) defined benefit pension plans are a cost-effective way for cooperative associations and charities to provide their employees with economic security in retirement, (2) many cooperative associations and charitable organizations are only able to provide their employees with defined benefit pension plans because those organizations are able to pool their resources using the multiple employer plan structure, and (3) the pension funding rules should encourage cooperative associations and charities to continue to provide their employees with pension benefits.
(Sec. 3) Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code to define a "cooperative and small employer charity pension plan" (CSEC pension plan), for purposes of this Act, as a defined benefit pension plan: (1) to which certain provisions of the Pension Protection Act of 2006 apply; and (2) that, as of January 1, 2013, was maintained by more than one employer all of whom were tax-exempt charitable organizations.
(Sec. 4) Amends ERISA and the Internal Revenue Code to establish minimum funding standards for CSEC pension plans and special rules for valuation of plan assets.
Permits the Secretary of Labor to extend an amortization of any unfunded liability of a CSEC pension plan for up to 10 years if the Secretary determines that: (1) such extension would carry out the purposes of this Act and would provide adequate protection for plan participants and their beneficiaries, and (2) failure to permit such extension would result in a substantial risk to the voluntary continuation of the plan or a substantial curtailment of pension benefit levels or employee compensation.
Allows a CSEC plan that uses a funding method that requires contributions in all years to maintain an alternative minimum funding standard account for any plan year.
Sets forth rules governing contributions to CSEC plans. Imposes a lien in favor of a CSEC plan for failure to make required contributions.
(Sec. 5) Requires a notice to participants in a CSEC plan to include: (1) a statement that different rules apply to CSEC plans than apply to single-employer plans; and (2) for the first 2 years beginning after December 31, 2013, a statement that, as a result of changes made by this Act, the contributions to the plan may have changed. Authorizes the Secretary to modify the model notice required by the Pension Protection Act of 2006 to include such statements.
Defines "applicable plan year," for purposes of this Act, as any plan year beginning after December 31, 2013, for which: (1) the plan has a funding shortfall greater than $1 million, and (2) the plan had 50 or more participants on any day during the preceding plan year.
Requires annual reports for CSEC plans to include a list of participating employers and a good faith estimate of the percentage of total contributions made by such employers during the plan year.
(Sec. 6) Amends ERISA and the Internal Revenue Code to allow a CSEC plan sponsor to elect not to treat such plan as a CSEC plan in plan years beginning after 2013.
Amends the Pension Protection Act of 2006 to allow a pension plan sponsor an election to cease treating a plan as an eligible charity plan for plan years beginning after 2013.
(Sec. 7) Requires the Participant and Plan Sponsor Advocate established under ERISA to make itself available to assist CSEC plan sponsors and participants as part of its duties performed under the general supervision of the Board of Directors of the Pension Benefit Guaranty Corporation (PBGC).
(Sec. 8) Makes the provisions of this Act applicable to years beginning after December 31, 2013.