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Funding of a bargained defined benefit pension plan
Summary A company asked whether its bargained nonqualified pension plan was subject to minimum funding rules. DOL said the uninsured defined benefit plan fell within no cited exception and would be covered if the employer engaged in commerce or an affecting industry. It also identified a then 40-year amortization period for qualifying preexisting past-service liability.
Document
Federal opinion letter
Agency
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Document number
P/OPINION 75-39
Date issued
March 10, 1975
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EBSA's index does not mark withdrawn or superseded opinions; still posted on dol.gov as of 2026-10-26.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
Topics
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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 75-39
4(b)✓
301
302
March 10, 1975
Dear :
This is in response to your letter of February 28, 1975,
requesting a ruling on behalf of your client,
Company , of , as to
whether the non-qualified pension plan ("Plan") created
pursuant to an agreement between [city] and Local No.
dated August 1, 1972 ("Agreement") is subject
to the funding requirements of Part 3 of Title I of the
Employee Retirement Income Security Act of 1974 ("the Act").
Under section 301(a) of the Act, an uninsured defined
benefit pension plan which is established or maintained
by an employer engaged in commerce or in an industry
or activity affecting commerce and which does not fall
under any of the coverage exceptions set forth in section
4(b) and 301(a)(1) through (9) is subject to the funding
provisions of Title I, Part 3, of the Act.
Under the facts set forth in your letter and the
accompanying materials, the Plan is an uninsured defined
benefit pension plan and does not fall under any of the
exceptions to coverage set forth in sections 4(b) and
301(a). If is engaged in commerce or in an
industry or activity affecting commerce, the Plan is
covered by the funding provisions of Title I, Part 3, of
the Act.
Since the provisions in the Agreement relating to the Plan
were in effect on January 1, 1974, by virtue of section
302(b)(2)(B)(i) of the Act the unfunded past service
liability under the Plan on the first day of the first
plan year to which Part 3 of Title I may apply may be
amortized over a period of 40 plan years.
I hope this information will be helpful to you.
Sincerely,
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