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Union severance pay plan treated as an ERISA pension plan
Summary DOL explained that the described union-funded severance plan is an ERISA pension plan to the extent it defers employees' income until their employment ends or later. The determination concerned a separately funded plan for salaried union personnel; the PDF prints November 5 as its date although it describes a November 8 request.
Document
Federal opinion letter
Agency
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Document number
P/OPINION 74-01
Date issued
November 5, 1974
Status
Unknown
EBSA's index does not mark withdrawn or superseded opinions; still posted on dol.gov as of 2026-10-26.
Status last verified October 26, 2026
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About this page: The full text below is the official document from U.S. Department of Labor, Employee Benefits Security Administration (EBSA). Ezel adds the plain-English summary and tracks the document's status. The official source linked on this page is authoritative for any reliance.
P/OPINION 74-01
3(2) ✓
4
201
301
401
November 5, 1974
Gentlemen
This is in reply to your letter, dated November 8, 1974,
concerning the Employee Retirement Income Security Act of
1974 (ERISA).
Your letter relates to the Severance Pay Plan
(Plan) which pays benefits to full-time, salaried officers,
agents and dispatchers of the (Council) and
Participating Locals within the Council upon their termination
of employment. The Plan is administered by a Governing Board,
and benefits are funded by uniform assessments and per capita
taxes collected from the Participating Locals and forwarded
to the Board where they are held in a separate account. You
ask whether or not the Plan is covered by the ERISA.
We cannot agree with your contention that the Plan is little
more than an enforced savings plan. As the Plan has been
established and is maintained by an employee organization
to the extent that by its express terms or as a result of
surrounding circumstances it "results in a deferral of income
by employees for periods extending to the termination of
covered employment or beyond, regardless of the method of
calculating the contributions made to the plan, the method
of calculating the benefits under the plan or the method of
distributing benefits under the plan", it is an employee
pension benefit plan within the definition contained in
Section 3(2)(B) of the ERISA. Additionally, as such employee
organization represents employees engaged in commerce or in
an industry or activity affecting commerce, and as none of the
five exceptions set out in section 4(b) of the ERISA are
applicable to the Plan, it is an employee pension benefit
plan covered by such Act.
If we may be of further assistance to you, please write to
us again.
Sincerely yours,
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