President Signs Law Retaining Status of YMCA Retirement Fund

President Bush signed into law, on December 21, 2004, legislation to treat certain arrangements maintained by the YMCA retirement fund as church plans for purposes of certain provisions of the Internal Revenue Code. The House passed the bill (H.R. 5365) on November 19, and the Senate passed the measure on December 7.

The law ensures that the YMCA retirement fund will retain it status as a church fund and will continue to receive different tax treatment for its retirement funds than other nonprofit organizations. The law requires the fund to adopt certain ERISA provisions on enrollment, vesting and contributions. The fund is allowed to commingle the assets of all its plans, a practice that is restricted under the Tax Code, and to continue to self-annuitize all account balances without an insurance company. The Act is effective for plan years beginning after December 31, 2003.