[Congressional Record Volume 140, Number 24 (Tuesday, March 8, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 8, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
     INTRODUCTION OF CHURCH RETIREMENT BENEFITS SIMPLIFICATION ACT

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                        HON. BENJAMIN L. CARDIN

                              of maryland

                    in the house of representatives

                         Tuesday, March 8, 1994

  Mr. CARDIN. Mr. Speaker, today I am introducing the Church Retirement 
Benefits Simplification Act of 1994. This legislation, which in the 
last Congress had nearly 100 cosponsors, will simplify the rules in the 
Internal Revenue Code which apply to retirement plans sponsored by our 
country's religious denominations.
  The centerpiece of the legislation is a proposed new section 410A of 
the Tax Code which would bring together in one place, and clarify, tax 
rules governing church retirement plans. By providing a separate code 
section which sets forth these rules as they apply to religious 
denominations, the bill will remove a great source of confusion and 
complexity. The relief provided by the bill applies to churches and to 
church ministry organizations, but not to church-related hospitals and 
universities.
  The bill will extend relief already provided to churches which 
maintain 403(b) plans to churches and church ministry organizations 
which offer plans under section 401A. In the Tax Reform Act of 1986, 
Congress exempted churches with 403(b) plans from coverage and related 
rules. It is time to provide the same treatment to churches with 401(a) 
plans and remove the disparity we created then.
  The need for this legislation stems from the fundamental differences 
between churches and the secular business organizations to which the 
coverage and related rules are primarily designed to apply. Churches 
and church ministry organizations are tax exempt. They therefore lack 
the incentive private sector employers have to maximize tax deductible 
employee benefit payment.
  A related point is that the coverage and related rules are designed 
to limit the amount of income highly compensated employees can be paid 
on a tax-deferred basis. According to the 1990 Church Pensions 
Conference, however, ministers' salaries averaged just over $28,000. 
These modest salary levels leave little cause for concern about the 
dangers nondiscrimination testing is designed to prevent.
  In some cases, requirements of the Tax Code are directly at odds with 
the theology and polity of particular denominations. While some 
denominations are hierarchical, others include many small, independent 
churches which have neither the personnel nor the resources to deal 
with complex compliance requirements.
  By exempting churches and church ministry organizations from coverage 
and related rules, this legislation will permit them to devote their 
resources to fulfilling their spiritual and community-oriented 
missions.

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