TheWeekInCongress

TheWeekInCongress.com

Week Ending July 16, 2004

S 2589 to clarify the status of certain retirement plans and the organizations that maintain those plans.

BRIEF

The bill goes to great lengths to define very specifically what retirement plans qualify as ‘church’ retirement plans and the benefits and responsibilities that come with that designation.

An ‘eligible organization’ means more than one church recognizes employment at the organization by a duly ordained, commissioned or licensed minister as service in the minister’s ministry. And, at least one nationally or internationally recognized church association includes the organization in its directory of participating or founding organizations. And, and the organization or national representation body of it is part of an ecumenical movement founded in the 19^th century to promote worldwide fellowship united by common loyalty to certain religious values. And the organization’s national representative body has chartered at least one organization that provided educational, recreational, social and religious support to the armed forces of the United States. And, the organization has a retirement plan which is administered by an organization which was established by State law by a special act of the legislature and subject to certain provisions of the States insurance law; whose principal purpose or function of which is the administration or funding of a plan or program for the provision of retirement benefits or welfare benefits or both for employees of the eligible organization (church); and is treated as an entity exempt from tax under section 501 (m) of the IRS Code and whose organizing documents are amended no later than January 1 2006 to require that, for plan years beginning on or after such date, the greater of 2 trustees or 10 percent of the membership of its boards of trustees be associated with a church. (Association with a church may include past or present service as an officer or board member of a church)

Having met those requirements the ‘organization’ may not be prohibited from commingling, for investment purposes, its assets with any other assets of the organization and the plan may offer a lump-sum distribution option to participants who have not attained age 55 without offering such participants an annuity option, and any account maintained for a participant or beneficiary of such plan shall be treated as a retirement income account.

Sponsor: Senator Jim Bunning (R-KY)

Vote: Passed Senate by Unanimous Consent (July 14, 2004)