[Congressional Record Volume 141, Number 154 (Friday, September 29, 1995)]
[Senate]
[Pages S14744-S14745]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH (for himself, Mr. Breaux, Mr. Lugar, and Mr. 
        Cochran):
  S. 1296. A bill to amend the Employee Retirement Income Security Act 
of 1974 to clarify the treatment of a qualified football coaches plan; 
to the Committee on Finance.


 the qualified football coaches plan technical corrections act of 1995

  Mr. HATCH. Mr. President, on behalf of myself and Senator Breaux, I 
rise today to introduce the Qualified Football Coaches Plan Technical 
Corrections Act of 1995. We are joined in this effort by Senators 
Lugar, and Cochran.
  As the title indicates, this bill is a technical correction to ensure 
the proper qualification of a retirement plan for many of America's 
college football coaches. All of us in this body are in favor of 
encouraging retirement saving. However, the retirement plan set up for 
many of these football coaches is in serious jeopardy.
  Mr. President, let me explain what brought us to the point we are 
today on this issue. In 1987, Congress recognized the unique aspects of 
the coaching profession and passed legislation to permit the American 
Football Coaches Association [AFCA] to set up and maintain a qualified 
cash and deferred arrangement under Section 401(k) of the Internal 
Revenue Code. The bill amended Title I of ERISA to permit such a plan 
to be treated as a qualified multiemployer plan. Due to the frequency 
with which football coaches change jobs, legislation was needed to 
assist them in maintaining a retirement plan that is adequately 
portable.
  In reliance on this legislation, the American Football Coaches 
Association, which represents over 4,400 college football coaches at 
676 schools, sponsored a 401(k) plan for its members that today has 
over 500 participants.
  However, on the same day this legislation was passed, Congress was 
involved in addressing another problem contained in ERISA that was 
unrelated to the football coaches retirement plan. The problem was an 
unfavorable Tax Court ruling that held that the ERISA standard 
regarding employer withdrawals from pension plans, rather than the 
standard under the Internal 

[[Page S 14745]]
Revenue Code of 1986, applied for purposes of interpreting the Internal 
Revenue Code. Thus, Congress, in an attempt to reject the holding of 
the Tax Court as it applied to Title I of ERISA, included a provision 
stating that Title I and Title IV of ERISA are not appicable in 
interpreting the Internal Revenue Code of 1986. This, of course, had 
the unintended consequence of deeming the football coaches retirement 
plan an invalid plan for purposes of the Internal Revenue Code.
  Following the creation of the retirement plan, the coaches 
association asked the Internal Revenue Service to confirm the 
tax qualified status of the retirement plan. On three separate 
occasions, Mr. President, the Internal Revenue Service issued 
determination letters confirming the tax qualified status of the plan 
for years 1988, 1989, and 1991. It was not until 1992 that the Internal 
Revenue Service determined that the 1987 provision invalidates what 
Congress did in Title I of ERISA to authorize the coaches 401(k) plan. 
In that year, the IRS changed its position on the exempt status of the 
coaches' retirement plan and indicated it would revoke the 
determination letters unless clarifying legislation is passed. The 
horrible result will be a forced termination of the plan by the end of 
1995 which will impose a substantial cost on the football coaches and 
leave them without a retirement plan.

  Mr. President, the original enacting legislation in 1987 was a 
bipartisan effort cosponsored by 34 Members of the Senate and 151 
Members in the House. This clarifying legislation is also a bipartisan 
effort. This bill eliminate the uncertainty that these coaches have 
been forced to live with since 1988.
  Mr. President, I have requested the Joint Committee on Taxation 
estimate the revenue impact of this bill. The Joint Committee concluded 
that this change is technical in nature and would have no revenue 
impact. However, I do want to point out that if this change is not 
made, hundreds of coaches will risk the loss of retirement benefits. 
This is not the message we should send to those who follow in good 
faith, the actions of a prior Congress.
  I wish to commend the Senator from Louisiana, Senator Breaux, for his 
leadership on this issue. I urge my colleagues to support this 
legislation. It is the right thing to do and is long overdue.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

         Be it enacted by the Senate and House of Representatives 
     of the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Qualified Football Coaches 
     Plan Technical Corrections Act of 1995''.

     SEC. 2. CLARIFICATION OF TREATMENT OF QUALIFIED FOOTBALL 
                   COACHES PLANS.

       (a) In General.--Subparagraph (F) of section 3(37) of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1002(37)(F)) is amended by redesignating clause (ii) as 
     clause (iii) and by inserting after clause (i) the following 
     new clause:
       ``(ii) For purposes of the Internal Revenue Code of 1986--
       ``(I) clause (i) shall apply, and
       ``(II) a qualified football coaches plan shall be treated 
     as a multiemployer collectively bargained plan.''
       (b) Effective Date.--The amendments made by this section 
     shall apply to years beginning after December 22, 1987.
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