By Paula Aven Gladych
Legislation has been introduced that would provide relief to nonprofit organizations like Girl Scouts of the USA, which now have higher pension funding rules than taxable, for-profit companies.
The bipartisan Charitable Flexibility Act, sponsored by U.S. Reps. Susan Brooks, R-Ind., and Ron Kind, D-Wis., was developed in collaboration with the Girl Scouts and enables charities
with affiliates, such as universities and nonprofit hospitals, to opt-in early, starting next year, to the pension funding rules that cover corporate plans.
The legislation applies to charity pension plans with multiple entities that are exempt from normal pension funding rules until 2017. The bill would permit such plans to elect into the normal rules in 2014. A technical correction that previously passed the Senate would have permitted this same option.
Absent prompt Congressional relief, local Girl Scout councils predict they will have to cut programs, lay off staff, and engage in other cost-cutting measures.
Local councils are facing a 40 percent increase in their pension expense next year and a 62 percent increase over the next three years. Overall, councils across the country will have to contribute $36 million more than a corporate plan sponsor would in the same situation.
Originally published on BenefitsPro.com