BILL IN SUPPORT OF RELIEF TO MENNONITE MUTUAL AID -- (Extensions of Remarks - May 19, 2006)
* Mr. SOUDER. Mr. Speaker, I rise today in support of a bill that would offer relief to Mennonite Mutual Aid, a organization affiliated with the Mennonite church based in Indiana that provides individuals with socially-conscious investment and retirement options.
* For more than 40 years Mennonite Mutual Aid has been offering defined benefits to its customers in the form of annuities paid directly from its 401(a) defined contribution church retirement plan, a process known as ``self-annuitization.'' However, regulations issued by the IRS in 2002 prohibited the practice of self-annuitization, although they allowed it for church retirement plans organized under section 403(b)(9). Instead, the IRS stated that plans must purchase annuities from commercial insurance companies.
* Mr. Speaker, there is no good policy reason for why the two types of church plans should be treated differently regarding self-annuitization. Furthermore, the Department of the Treasury has indicated they would not oppose a legislative change on this issue. Churches should have the right to invest for retirement in the ways they see fit, and commercial insurance companies cannot and do not manage their investments according to these high standards. Moreover, the ability to offer annuities is necessary to prevent the possibility of beneficiaries outliving their retirement funds under an alternative installment payment system. In order to prevent this unfairness, my bill would use a ``grandfather'' approach to grant the ability to self-annuitize only to those 401(a) plans that were in existence on the date the final IRS regulations were issued in 2002.
* Mr. Speaker, I urge my colleagues to support this bill so that the Mennonites can continue to offer annuities invested in the way they see fit.
http://thomas.loc.gov/