Participant co-trustee bonding duties

P/OPINION 75-123


                                                                412


                        November 13, 1975


Dear           :

Your letter of January 11, to                 of the
         Regional Office has been referred to this office
for reply. In your letter you inquired as to the applicability
of the bonding provisions of section 412 of the Employee
Retirement Income Security Act of 1974 (the Act) to a person
who is both a participant in and a co-trustee for a profit-
sharing or money purchase pension plan established by a small,
closely held professional corporation.

Your letter indicates that such plan covers several employees
of the corporation besides its professional members and that
plan participants are not allowed to select the form of investment
for monies allocated to their individual accounts.

Subject to certain exceptions, section 412(a) of the Act
requires that every person who handles funds or other
property of an employee benefit plan covered by Part 4 of
Title I of the Act shall be bonded. The term "handles,"
as used in this context, is defined in 29 CFR 464.7
adopted under section 13 of the Welfare and Pension Plans
Disclosure Act and incorporated by reference in the
temporary bonding regulation adopted under section 412 of
the Act (40 FR 2203, January 10, 1975). Thus, if the
trustee of the plan described in your letter handles the
plan assets within the meaning of 29 CFR 464.7, he or she
should be bonded in accordance with the provisions of section
412 of the Act.

Sincerely,