[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.

                          ____________________