The legislation also includes language based on an amendment introduced by Senator Roberts that recognizes the unique nature of multiple employer pension plans sponsored by rural electric, rural telephone and agriculture cooperatives.

"In Kansas, we have more than 160 rural cooperatives with thousands of employees that rely on multiple employer plans. This bill will help these co-ops to better plan their pension funding obligations," said Senator Roberts.

The Roberts amendment recognizes multiple employer plans’ lack of risk to the Pension Benefit Guaranty Corporation (PBGC). Since multiple employer plans would continue to operate even if some cooperatives were to go out of business, the bill delays the date that these plans must comply with the new funding rules for nine years.

Other key provisions of the bill include:

• Strengthening single-employer defined benefit plans by requiring employers to better measure their pension obligations and ensure that they make sufficient contributions to fund 100 percent of their pension liabilities, an increase from the 90 percent funding requirement under current law.
• Providing stronger new rules for plans that are underfunded. Employers would have to make additional contributions to make up this underfunding, and the underfunding would have to be made up over a seven year period. An important provision of the bill imposes restrictions on deferred-compension arrangements for executives of companies with severely underfunded pension plans.
• Providing new funding rules for multi-employer plans and requiring that underfunded plans make improvements to ensure that they that can meet their commitments to their plan participants. The bill increases disclosure requirements to make certain employers and workers have timely information about the funding status and health of these plans.
• Adjusting premiums to ensure the solvency of the PBGC.
• Providing prospective clarification for hybrid plans.
• Helping financially struggling airlines by allowing them additional time to meet their pension obligations and avoid turning their plans over to the PGBC.

The bill also contains important provisions relating to defined contribution plans. It requires that employees receive information about their right to diversify their pension plans, and receive periodic account statements and notice of blackout periods. In addition, the bill allows employers to offer investment advice to their employees, subject to strict rules that make certain that any advice given is in the employee’s best interest.

Another important feature in the bill creates a safe harbor to encourage employers to automatically enroll employees in the employer’s defined contribution plan. However, employees may choose to opt out. This provision is intended to help encourage employees to save for retirement.

The bill makes permanent the Savers’ Credit that allows lower-income individuals to save for retirement. Eligible individuals who make contributions to an IRA or qualified pension plan can received a federal "match" in the form of an income tax credit for the first $2,000 of annual contributions.

The bill makes permanent the tax treatment of 529 college savings plans that allow tax-free withdrawals from 529 accounts provided that they are used for educational purposes.

It also makes permanent the individual retirement account (IRA) and pension provisions enacted in 2001. The law increased annual contribution limits for IRAs and qualified pension plans, created additional "catch-up" contributions for individuals age 50 and older, and created incentives for small employers to offer pension plans. These reforms – initially enacted in 2001 – would have expired after 2010.

Finally, the bill includes tax incentives intended to increase charitable giving, along with new rules to help guard against abuses by charitable organizations.

Senator Roberts is a member of the Senate Health, Education, Labor and Pensions Committee.