Inter-Local Pension Fund Bill

Floor Speech

* Mr. NEAL. Madam Speaker, I rise today to introduce legislation to improve the retirement savings of hard-working union members. Specifically, members of the Inter-Local Pension Fund of the Graphic Communications Conference of the International Brotherhood of Teamsters do not have access to some of the same retirement provisions that other workers do. And I think it simply makes no sense.

* The Fund, formed in 1950, is a 501(c)(18) pension trust that provides benefits to 12,500 active and 20,000 retired union members. Sixty-eight local affiliated unions participate in the Fund, and benefits are financed entirely by employee contributions and the earnings thereon. Section 501(c)(18) provides a tax exemption for a pension trust created before June 25, 1959 and funded solely by employee contributions. Further, the pension plan of which the trust is part must satisfy certain nondiscrimination tests. The Fund appears to be the sole remaining section 501(c)(18) pension trust in existence.

* Madam Speaker, my legislation would simply apply the same cap to annual contributions to 501(c)(18) pension trusts that applies to annual elective deferrals in 401(k) plans. Those caps for workers in 401(k) plans are also adjusted for inflation. Without such parity the Fund's pension value will continue to decline. These workers deserve to be on equal ground as 401(k) participants.

* Additionally, the legislation makes available to the Fund the same exception from the debt-financed real property rules currently available to section 401 pension trusts allowing for better diversification of assets.

* In closing, Madam Speaker, these provisions will allow the Fund to better serve its union members and do so in sync with its tax exempt purpose of providing self-funded employee benefits. I urge my colleagues to join me in supporting this legislation.

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