Congresswoman Susan W. Brooks

Representing the 5th District of Indiana
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Brooks Pension Reform Bill Passed by U.S. House

Mar 24, 2014
Press Release
Legislation Heads to President’s Desk

Legislation introduced by Congresswoman Susan W. Brooks (R-IN5) freeing charitable and cooperative associations from burdensome federal pension requirements was passed by the U.S. House of Representatives today. House Resolution 4275 – the Cooperative and Small Employer Charity Pension Flexibility Act – will benefit more than 1,500 Hoosier employees and will head directly to the President for signature since the Senate passed identical legislation on January 28 of 2014.

“The future of charitable organizations and our rural electric cooperatives is in jeopardy because of federal requirements that fail to recognize the unique structure of these groups,” Congresswoman Brooks said. “They provide vital services to our communities and help so many people struggling to get by and build a better life for themselves and their families. This common sense 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.”

The legislation ensures that charitable and cooperative associations are not swept into the Pension Protection Act of 2006 (PPA) funding rules, which require them to fund their pension plans at levels commonly associated with high risk plans. These groups received a temporary exemption from the rules in 2006 which is set to expire in 2017. H.R. 4275 makes the exemption permanent.

"This finishes the job Congress started in 2006,” Scott Bowers of the Indiana Statewide Association of Rural Electric Cooperatives said. “PPA didn't make sense for rural co-op plans like ours then, and still doesn't make sense now. Congresswoman Brooks understands our unique business model and pension plan design and we thank her on behalf of more than 1,500 Hoosiers who will benefit from this effort. Her bill recognizes our plans pose virtually no risk of default, and should be treated that way permanently."

Pension plans operated by charitable and cooperative organizations are called “multiple employer” plans and contain virtually no risk of default. H.R. 4275 is narrowly targeted to address Cooperative and Small Employer Charities (CSEC) whose mission is to provide necessities of life or facilitate the sustainable development of our communities.

Without action by Congress, too many cooperative and small employer charities —including some Indiana private schools and some chapters of nonprofits — could be forced to reduce their services to the public and even eliminate their pension plans for employees.

The legislation actually reduces the deficit by $254 million and has received widespread bipartisan support in both the U.S. House and U.S. Senate. It has also been endorsed by the following groups:

·         Christian Schools International

·         The Jewish Federations of North America

·         United Way Worldwide

·         National Rural Electric Cooperative Association

·         Girl Scouts of the USA

·         National Council of Farmer Cooperatives

·         United Jewish Appeal – Federation of New York, Inc.

·         Hawkeye Insurance Association

·         NTCA – The Rural Broadband Association

·         United Benefits Group

·         Lincoln Center for the Performing Arts

For more information on Congresswoman Brooks, please visit www.SusanWBrooks.house.gov