[Congressional Record Volume 150, Number 134 (Friday, November 19, 2004)]
[House]
[Pages H10042-H10044]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TREATING CERTAIN ARRANGEMENTS BY YMCA RETIREMENT FUND AS CHURCH PLANS
Mr. ENGLISH. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 5365) to treat certain arrangements maintained by the YMCA
Retirement Fund as church plans for the purposes of certain provisions
of the Internal Revenue Code of 1986, and for other purposes.
The Clerk read as follows:
H.R. 5365
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
[[Page H10043]]
SECTION 1. CERTAIN ARRANGEMENTS MAINTAINED BY THE YMCA
RETIREMENT FUND TREATED AS CHURCH PLANS.
(a) Retirement Plans.--
(1) In general.--For purposes of sections 401(a) and 403(b)
of the Internal Revenue Code of 1986, any retirement plan
maintained by the YMCA Retirement Fund as of January 1, 2003,
shall be treated as a church plan (within the meaning of
section 414(e) of such Code) which is maintained by an
organization described in section 414(e)(3)(A) of such Code.
(2) Tax-deferred retirement plan.--In the case of a
retirement plan described in paragraph (1) which allows
contributions to be made under a salary reduction agreement--
(A) such treatment shall not apply for purposes of section
415(c)(7) of such Code, and
(B) any account maintained for a participant or beneficiary
of such plan shall be treated for purposes of such Code as a
retirement income account described in section 403(b)(9) of
such Code, except that such account shall not, for purposes
of section 403(b)(12) of such Code, be treated as a contract
purchased by a church for purposes of section 403(b)(1)(D) of
such Code.
(3) Money purchase pension plan.--In the case of a
retirement plan described in paragraph (1) which is subject
to the requirements of section 401(a) of such Code--
(A) such plan (but not any reserves held by the YMCA
Retirement Fund)--
(i) shall be treated for purposes of such Code as a defined
contribution plan which is a money purchase pension plan, and
(ii) shall be treated as having made an election under
section 410(d) of such Code for plan years beginning after
December 31, 2005, except that notwithstanding the election--
(I) nothing in the Employee Retirement Income Security Act
of 1974 or such Code shall prohibit the YMCA Retirement Fund
from commingling for investment purposes the assets of the
electing plan with the assets of such Fund and with the
assets of any employee benefit plan maintained by such Fund,
and
(II) nothing in this section shall be construed as
subjecting any assets described in subclause (I), other than
the assets of the electing plan, to any provision of such
Act,
(B) notwithstanding section 401(a)(11) or 417 of such Code
or section 205 of such Act, such plan may offer a lump-sum
distribution option to participants who have not attained age
55 without offering such participants an annuity option, and
(C) any account maintained for a participant or beneficiary
of such plan shall, for purposes of section 401(a)(9) of such
Code, be treated as a retirement income account described in
section 403(b)(9) of such Code.
(4) Self-funded death benefit plan.--For purposes of
section 7702(j) of such Code, a retirement plan described in
paragraph (1) shall be treated as an arrangement described in
section 7702(j)(2).
(b) YMCA Retirement Fund.--For purposes of this section,
the term ``YMCA Retirement Fund'' means the Young Men's
Christian Association Retirement Fund, a corporation created
by an Act of the State of New York which became law on April
30, 1921.
(c) Effective Date.--This section shall apply to plan years
beginning after December 31, 2003.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Pennsylvania (Mr. English) and the gentleman from North Dakota (Mr.
Pomeroy) each will control 20 minutes.
The Chair recognizes the gentleman from Pennsylvania (Mr. English).
Mr. ENGLISH. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise today to support H.R. 5365, legislation that I
had the privilege to introduce along with the gentleman from North
Dakota (Mr. Pomeroy). The gentleman from North Dakota and I have been
working together for a number of years to make this important
clarification, and I appreciate his dedication and leadership on this
issue. I also want to thank the gentleman from California (Chairman
Thomas) and the Committee on Ways and Means for their invaluable
assistance in bringing this bill to the floor today.
Mr. Speaker, this bill is designed to ensure that thousands of
pension plan participants and retirees from the YMCA can continue to
count on their benefits. It addresses a concern about the technical
status of the YMCA pension plan as a church plan, a type of pension
plan offered by churches or associations of churches which brings with
it a special set of rules and regulations under the Tax Code. While the
Y pension plan was founded as and historically has been treated as a
church plan, the IRS has on occasion puckishly called its status into
question. This bill ensures that its status remains a church plan and
that the plan may continue to operate as has been for over 80 years
with clear congressional intent.
The YMCA pension plan is a significant and important component of the
compensation package offered all YMCA employees, most of whom are paid
modestly. Every full-time employee of local YMCAs is required to
participate to help ensure better retirement security for all of these
employees. The YMCA pension plan is important to the YMCA employees and
retirees in my district in Pennsylvania, as it is to those plan
participants in most likely each and every congressional district
across the country.
This legislation has a vital impact on more than 3,000 families in
Pennsylvania and over 80,000 participants nationwide because it offers
them financial and retirement security for their long service on behalf
of our Nation's YMCAs, one of our most important organizations
operating within communities throughout this country. I am pleased that
we are moving forward with this bill today to preserve the status quo,
and I encourage all of my colleagues to actively support this bill.
Mr. Speaker, I reserve the balance of my time.
Mr. POMEROY. Mr. Speaker, I yield myself such time as I may consume.
I am very pleased to join the gentleman from Pennsylvania (Mr.
English) in the sponsoring of this bill. I want to also express my
gratitude to the gentleman from California (Chairman Thomas) for
allowing the bill to come forward and to the gentleman from New York
(Mr. Rangel), ranking member, for his interest and support of this
legislation.
The YMCA puts Christian principles into the communities by programs
that advance healthy minds and strong bodies. They serve 18 million
Americans every year and operate throughout its 90-year existence a
pension plan for the modestly paid individuals that make these
facilities what they are to those enjoying their services.
The YMCA retirement plan requires each and every employee to
participate, provides retirees with annuities that guarantee monthly
income for life. In fact, 98 percent of retirees choose a lifetime
income over that lump sum payment option.
As we look at this whole retirement savings, retirement income
conundrum, and we are certainly going to be deeply involved in that
this coming congressional session, I hope we can agree that we are
going to try to keep in the marketplace what works. And certainly when
it comes to the YMCAs pension program, this is a plan that works.
It has been placed in some question because of the IRS's evaluating
whether or not it appropriately qualifies under the church-sponsored
plan, as was mentioned by the gentleman from Pennsylvania (Mr.
English). It is important to legislatively take that, shed that cloud
off of this pension program. I appreciate the IRS for forbearing while
Congress has been allowed through this legislation to straighten out
and clarify that we do not want any changes to the YMCA pension plan.
This is a plan that is working and serving its people well. We want it
to continue as it has done, and that is the effect of this legislation.
In North Dakota we have 820 YMCA employees and retirees whose fate is
linked in some respect to this legislation. Nationally 88,000 have a
stake in this legislation.
I hope that as we pass this legislation today, we can take this as a
precedent. These pension issues deserve bipartisan approach, like the
bill before us, and we need to build on the concept, keep what works,
move to address the other areas as these solutions present themselves.
So I am very pleased to advance H.R. 5365 and urge its adoption.
Mr. Speaker, I reserve the balance of my time.
Mr. ENGLISH. Mr. Speaker, I yield myself such time as I may consume.
I will submit the exchange of letters between the gentleman from
California (Chairman Thomas) and the gentleman from Ohio (Chairman
Boehner) relating to the jurisdiction of this bill for the Record.
Committee on Education and the Workforce, House of
Representatives,
Washington, DC, November 19, 2004.
Hon. William M. Thomas,
Chairman, Committee on Ways and Means,
Washington, DC.
Dear Chairman Thomas: I am writing to confirm our mutual
understanding with respect to consideration of H.R. 5365, to
treat certain arrangements maintained by the
[[Page H10044]]
YMCA Retirement Fund as church plans for the purposes of
certain provisions of the Internal Revenue Code of 1986,
which was referred to the Committee on Ways and Means and in
addition the Committee on Education and the Workforce. The
bill would impact the Employee Retirement Income Security Act
(ERISA) as it applies to certain pension plans within the
jurisdiction of the Committee on Education and the Workforce.
I do not intend to delay consideration of H.R. 5365, nor
will I object to the scheduling of this bill for
consideration in the House of Representatives. However, I do
so only with the understanding that this procedural route
should not be construed to prejudice the Committee on
Education and the Workforce's jurisdictional interest and
prerogatives on these provisions or any other similar
legislation and will not be considered as precedent for
consideration of matters of jurisdictional interest to my
Committee in the future. Furthermore, should these or similar
provisions be considered in a conference with the Senate, I
would expect Members of the Committee on Education and the
Workforce be appointed to the conference committee on those
provisions.
Finally, I would ask that you include a copy of our
exchange of letters in the Congressional Record on this bill.
If you have questions regarding this matter, please do not
hesitate to call me. I thank you for your consideration.
Sincerely,
John A. Boehner,
Chairman.
____
U.S. House of Representatives,
Committee on Ways and Means,
Washington, DC, November 19, 2004.
Hon. John Boehner,
Chairman, Committee on Education and the Workforce,
Washington, DC.
Dear Chairman Boehner: Thank you for your letter regarding
H.R. 5365, a bill that would treat the YMCA Retirement Fund
as a church plan for certain provisions of the Internal
Revenue Code of 1986.
I appreciate your agreement to expedite the passage of this
legislation although it contains provisions relating to the
Employee Retirement Income Security Act of 1974 that are
within your Committee's jurisdiction. I acknowledge your
decision to forego further action on the bill is based on the
understanding that it will not prejudice the Committee on
Education and the Workforce with respect to its
jurisdictional prerogatives or the appointment of conferees
on this or similar legislation.
I appreciate your helping us to move this legislation
quickly to the floor. Since the Committee will not report his
bill, I will instead include in the Congressional Record as
copy of our exchange of letters on this matter. Thank you for
your assistance and cooperation. We look forward to working
with you in the future.
Best regards,
Bill Thomas,
Chairman.
Mr. Speaker, I reserve the balance of my time.
Mr. POMEROY. Mr. Speaker, I yield myself 30 seconds.
I believe each and every one of us in this Chamber appreciates the
work of the YMCA and recognizes that the YMCA is more than wonderful
facilities. It is the people there. It is the people there that make
these such a special part of our communities. If we want to do
something that shows our appreciation to these dear people in the YMCA,
let us move this legislation. This removes any shadow of a doubt that
their pension plan can continue to function as it has functioned for
virtually the entire life of the YMCA associations. This is a good
thing to do.
I am pleased to work with the gentleman from Pennsylvania (Mr.
English), my friend, in moving this legislation forward. Let this be a
place where the true spirit of bipartisanship can break out on a worthy
goal. Let us support this legislation.
Mr. Speaker, I yield back the balance of my time.
Mr. ENGLISH. Mr. Speaker, I yield myself the balance of my time.
I also want to salute the gentleman from North Dakota, who is a
valuable ally particularly in dealing with an issue like this that is
in a sense relatively straightforward, but deals with the
technicalities of the tax law. He has been a great resource to us and
to the committee, and it is a privilege for me to be co-sponsoring this
legislation with him.
Mr. Speaker, I think that if we look at the history of the YMCA in
America, we see the premier faith-based organization that has been
providing services to people throughout our communities and providing
services that have had an enormous cumulative social impact on America.
One of the essential components to the YMCA and how it operates is
its ability to offer this pension program to its employees. The YMCA
does not operate on a broad profit margin. So to be able to offer this
program with its tax status is critical to the Y's ability to attract
the kind of people who are willing to dedicate themselves to the
community. And this I believe is a very important piece of legislation
to maintain the status quo, to allow the Y to continue to offer not
only an excellent pension to its participants and to all of its hard-
working employees but also to continue to be able to offer the quality
of services in communities throughout America.
{time} 1400
Mr. Speaker, it is a privilege for me to urge my colleagues to gather
together on a bipartisan basis to approve this bill.
Mr. BOEHNER. Mr. Speaker, I rise in support of the YMCA Retirement
Fund Act, a bill sponsored by Mr. English. Strengthening employee
pension plans has been a longstanding priority of mine, and I'm pleased
to support this common sense reform that will strengthen pension
benefits provided through the YMCA Retirement Fund.
This bill will ensure the Young Men's Christian Association's pension
plans are treated as church plans under the Internal Revenue Code, and
its employees are provided many of the important protections under the
Employee Retirement Income Security Act (``ERISA'').
The YMCA Retirement Fund has been in existence for more than eighty
years, and provides meaningful pension benefits to more than 80,000
participants across the nation. Employees of local YMCA's participate
in these pension plans and enjoy a vesting period of either two or
three years. These employees obtain a non-forfeitable right to their
pension benefits faster than employees under traditional qualified
plans.
I'm pleased today to support this bill to ensure the YMCA Retirement
Fund may continue providing these important pension benefits to its
employees, many of whom will now also benefit from the important
protections provided under ERISA.
Under the bill, the pension plans in the Fund may commingle assets
for investment purposes. While there may be certain restrictions on
this practice under the Internal Revenue Code, it is important to note
that it is not a per se violation to commingle assets under ERISA,
provided that the plan and its fiduciaries maintain appropriate
records. Therefore, the language should not suggest that other
qualified pension plans under ERISA cannot engage in this widely
accepted practice.
If the YMCA Retirement Fund's status as a church plan under the
Internal Revenue Code is not clarified for this narrow purpose, the
Fund may not have the ability to continue to provide the same generous
pension benefits to its participants, most of whom are modestly paid.
Finally, Mr. Speaker, I would note that while this legislation will
solve a problem for the more than 80,000 Americans involved with the
YMCA pension plan, the laws that govern all American worker pensions
will remain outdated and in desperate need of reform and repair. The
failure to update these laws has resulted in a very real threat that
taxpayers will be forced to pay for a multi-billion bailout of the
Pension Benefit Guaranty Corporation, which protects workers'
retirement benefits when their companies fail. It's absolutely critical
that we act in a bipartisan manner in the weeks and months ahead to
enact comprehensive, broad-based reforms that will modernize our
nation's pension laws and restore security for workers and taxpayers.
This is a top priority for me and the members of our committee, and I
know it is for Chairman Thomas and the members of the Ways and Means
Committee as well.
I want to thank Chairman Thomas and the bill's sponsor, Mr. English,
for their cooperation in bringing this bill to the House floor today.
I'm hopeful that we can build on this important legislation, and
continue our efforts to craft a solution that will protect the
retirement security of all our nation's workers in the same serious and
thoughtful manner that produced the bill we're considering today.
I urge my colleagues to support this bill.
Mr. ENGLISH. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Bass). The question is on the motion
offered by the gentleman from Pennsylvania (Mr. English) that the House
suspend the rules and pass the bill, H.R. 5365.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
____________________