The Senate Committee on Health, Education, Labor and Pensions (HELP) held a hearing July 16 to examine issues related to multiple employer defined benefit and defined contribution pension plans.
Committee Chairman Sen. Tom Harkin (D-IA) and Sen. Pat Roberts (R-KS), a fellow committee member, introduced legislation, the “Cooperative and Small Employer Charity Pension Flexibility Act of 2013,” to coincide with the hearing. Their bill would ease funding rules imposed by the Pension Protection Act on cooperatives and small employer charities that operate multiple employer DB plans, but allows organizations that want to be subject to the PPA rules to make a permanent election to that effect.
The legislation would also provide for a “time out” from scheduled PBCG premium increases on those organizations, freezing premiums at current levels while PBCG reevaluates how much these plans should be paying for pension insurance.
The hearing also addressed issues relating to multiple employer DC plans. Testimony by the Government Accountability Office highlighted the fact that no publicly available information has been collected on employers that sponsor multiple employer DC plans since 2004. In addition, regulatory uncertainty regarding such arrangements has increased significantly since the Department of Labor determined last year that some multiple employer pension plan arrangements made up of otherwise unrelated employers did not constitute single pension plans under ERISA.
Jim Kais, Senior Vice President of Transamerica Retirement Solutions, stated that in a direct response to this regulatory uncertainty, Transamerica recently introduced The Retirement Plan Exchange, a new private sector solution to pool retirement plans. The Exchange is not a multiple employer plan but a collection of single employer plans banded together to create economies of scale in order to lower investment fees that result from increased asset pools. While The Exchange can operate under current law, streamlining reporting and administrative requirements would enhance the efficiency of the current system.
Andrew Remo is ASPPA’s Congressional Affairs Manager.
