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119-s-2003119th CongressWALLET

Strengthening Benefit Plans Act of 2025

Sponsored By: Senator Scott, Tim [R-SC]

Introduced

Summary

Repurposing surplus pension and retiree health assets to let employers move excess funds into active employee benefits or into retirement savings, while adding vesting, notice, and anti-cutback protections. This bill would create two new transfer paths with conditions to protect participants and keep plans qualified.

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  • Retiree health accounts: Plans could transfer excess retiree-health assets to the pension plan or to a Voluntary Employees' Beneficiary Association. Transfers are allowed only when assets exceed 125% of liabilities and must meet use, funding, and vesting tests and occur no more than once per year.
  • Active employees and savers: Surplus defined benefit assets could move into defined contribution plans when assets exceed 110% of pension liabilities and the receiving plan would be a qualified replacement. All benefits under the defined benefit plan become nonforfeitable as if the plan had terminated and the replacement plan may not reduce benefits for five years.
  • Employers and plan governance: Transfers are not treated as employer reversions or taxable income, are coordinated with ERISA funding rules, and require participant notice at least 60 days before retiree-health transfers and similar notices for pension transfers.

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 0 benefits, 0 costs, 2 mixed.

Move extra retiree health money

If enacted, the bill would let an employer move "excess health assets" from a retiree health account into the employer's pension plan or to a voluntary employees' beneficiary association (VEBA). "Excess" means assets above 125% of the plan's liability, with some post‑2023 contributions and liability reductions excluded. Employers could do one transfer per taxable year, must give at least 60 days' notice to affected participants, and must meet vesting and minimum‑protection rules (including five‑year protections for VEBA benefits). Employers could not deduct the transferred amounts or benefits paid from them. This would apply to tax years beginning after December 31, 2024.

Move pension surplus into 401(k)-style

If enacted, the bill would let an employer transfer "surplus assets" from a defined benefit pension into a defined contribution plan that would be a qualified replacement plan but for the DB plan not ending. "Surplus" means assets above 110% of the Title IV liability measure for the plan year. All DB benefits must become nonforfeitable as if the plan had terminated just before the transfer. The replacement plan's benefits could not be cut during the transfer year and for four plan years after the last year it is funded by the transfer. The transfer would not be taxable income to the employer, but no deduction would be allowed and the transfer would not count as a reversion. This would apply to plan years beginning after December 31, 2025.

Sponsors & CoSponsors

Sponsor

Scott, Tim [R-SC]

SC • R

Cosponsors

  • Sen. Cassidy, Bill [R-LA]

    LA • R

    Sponsored 6/10/2025

  • Sen. Tillis, Thomas [R-NC]

    NC • R

    Sponsored 6/10/2025

  • Sen. Marshall, Roger [R-KS]

    KS • R

    Sponsored 6/10/2025

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov
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