Bill > S2003

This bill, called the "Strengthening Benefit Plans Act of 2025," introduces two key provisions to modify how pension and health benefit plans can manage their assets. First, the bill allows pension plans with excess health assets (defined as assets in a health benefits account that exceed 125% of the total liability for retiree health benefits) to transfer those excess funds to either the pension plan itself or to a voluntary employees' beneficiary association. These transfers can be used to fund active employee benefits, with strict limitations to ensure that employer costs and benefits are not materially reduced for five years following the transfer. The transferred assets will not be considered taxable income for the employer and will not be treated as an employer reversion or prohibited transaction. Second, the bill permits employers maintaining a defined benefit plan to transfer surplus assets (defined as assets exceeding 110% of plan liabilities) to a defined contribution plan, provided that all benefits become nonforfeitable and no benefits are reduced in the replacement plan for four plan years after the transfer. Both provisions aim to provide employers with more flexibility in managing their employee benefit plans while protecting employee interests, and they would take effect for taxable and plan years beginning after December 31, 2024, and 2025, respectively.

Budget and Finance

https://www.congress.gov/bill/119th-congress/senate-bill/2003/all-info