NFCA Signs Letter on Pension Funding Transition Relief

NFCA added as signatory to letter from Independent Sector to House Ways and Means Committee.

OAK BROOK, IL, November 24, 2008 – The National Fraternal Congress of America (NFCA) has added its signature to a letter from Independent Sector to the House of Representatives Committee on Ways and Means, addressing the Pension Protection Act and requesting transition relief for nonprofit organizations to meet those pension-funding targets.

“The NFCA and its Board of Directors feel this is an important issue for the association to address with legislators,” said NFCA President and CEO Joseph J. Annotti.  “We, along with Independent Sector, feel that nonprofits should be given sufficient time to transition to the Pension Protection Act’s 100% funded target, in light of the uncertain economic conditions we are faced with.”

The joint letter seeks Congress’ assistance in alleviating the increased pension funding obligations that have arisen due to the severe market downturn, which is threatening fraternal benefit societies’ and other nonprofits’ ability to continue services in hard-pressed communities.  The Pension Protection Act of 2006 significantly increased the funding obligations for pension plans, which nonprofits have endeavored to meet while continuing to maintain program services upon which individuals and communities rely.

Recently, Senate leaders proposed the following pension reforms.  Specifically, the Senate plan does three key things:  1) adopts a technical correction that permits smoothing of asset values; 2) provides transition relief in the form of retaining the full funding level for 2009 at 92% and removing the “cliff” that requires plans below the full funding level to fund up to 100% rather than 92%; and 3) permits plans to look to funding level at the beginning of 2008 rather than 2009 for determining whether Pension Protection Act automatic benefit restrictions are put in place.  The bill does not include a “maintenance of effort” provision that would have prevented plans from freezing benefit accruals.

“It appears that Senator Baucus (D-MT) and other leading senators made significant progress with these reforms, but may not have a way to get it enacted until January,” said Annotti.  “We remain hopeful that pension relief will be in the economic stimulus bill that President Obama introduces early in his term.”

About Independent Sector

Independent Sector is a nonprofit, nonpartisan coalition of approximately 600 charities, foundations, and corporate philanthropy programs, collectively representing tens of thousands of charitable groups in every state across the nation.  Its mission is to advance the common good by leading, strengthening, and mobilizing the nonprofit community.  For more information, visit www.independentsector.org.

About the NFCA

The 123-year-old NFCA unites 73 not-for-profit fraternal benefit societies operating in all 50 states, the District of Columbia and Canada.  The association represents 10 million fraternalists in 37,000 local chapters, making it one of America’s largest member-volunteer networks.  Fraternal benefit societies provide their members with leadership, social, educational, spiritual, patriotic, scholarship, financial and volunteer-service opportunities.  Combined, the NFCA’s member-societies maintain more than $343 billion of life insurance-in-force and, in 2007 alone, contributed almost $418 million to charitable and fraternal programs, and volunteered over 95 million hours for community-service projects.  These statistics demonstrate the commitment that fraternals make to those in need and exemplify the true meaning of the NFCA signature phrase:  Joining Hands to Touch Lives.


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