WASHINGTON (BP)–The U.S. House of Representatives has unanimously approved a bill to assist in retirement savings for pastors and other church employees.
The House voted 397-0 Sept. 3 for the Church Pension Plan Fairness Act, H.R. 1533. The bill amends securities and investment laws from the 1930s and 1940s to enable church pension plans to participate in collective trusts.
The legislation will not affect participants in retirement-related programs offered by the Southern Baptist Convention’s Annuity Board, Curt Sharp, the board’s executive officer for denominational and public relations, told Baptist Press Sept. 3.
“We are pleased when our law-makers recognize the importance of church-sponsored pension plans,” Sharp said before noting: “Participants in Annuity Board plans and programs already have the advantages of economies of scale and investment flexibility provided through the mutual funds established several years ago. This legislation should enhance the flexibility and efficiency of church pension programs that are outside a mutual fund structure.”
The new legislation is needed to correct an oversight by Congress, said Rep. Judy Biggert, R.-Ill., the bill’s chief sponsor.
Private employee and government pension plans are able to join together in collective trusts for investment in stocks and other interests, she said. This enables such plans to work together in order to diversify investments and “share the risk and transaction costs,” Biggert said upon introducing her bill.
The law, however, bars church pension plans from doing the same, she said.
Congress “has unintentionally failed to update church pension laws, making it more difficult for clergy and other church employees to maximize their retirement savings,” Biggert said. “[T]here is no sound policy reason for our securities laws to exclude church plan participation in specifically tailored pension plan investments.”
The measure would amend the 1933 Securities Act, the 1934 Securities Exchange Act and the 1940 Investment Company Act.
The House Financial Services Committee approved the bill by voice vote July 23.
The bill awaits action in the Senate.