Payments to former plan administrator during work ban

P/OPINION 75-90

                                                         404(a)(1)

                        October 20, 1975

Gentlemen:

The Office of Employee Benefits Security administers
and enforces provisions of Title I of the Employee
Retirement Income Security Act of 1974 (ERISA).
Included within this Title are the fiduciary responsi-
bility provisions, which are set forth in Part 4.

It has come to the attention of this Office that since
January 31, 1975, monthly payments in the amount of
$2,100 have been made under your authorization to
former administrative manager            . These
payments were made during a period in which [he] was
not permitted to be employed in any capacity by the Funds.
We are concerned that this disbursement may be in violation
of section 404(a)(1) of ERISA, which provides in pertinent
part that the assets of a plan shall be held exclusively
for the purpose of providing benefits to participants in
the plan and their beneficiaries and defraying reasonable
expenses of administering the plan.

For a plan to make payments to an individual who is not
currently rendering services, for or on account of
services earlier rendered, which services were compensated
at the time they were rendered and as to which there is no
obligation to make further payment, is not, in our view,
permitted by the statute.

Under the provisions of ERISA section 409(a), a fiduciary
is personally liable to make good to the plan any losses
resulting from a breach of fiduciary responsibility.
Accordingly, it would, in our view, be appropriate for
you to take prompt steps to assure the repayment to the
Funds of the total amount disbursed to Mr.
during the period from January 1, 1975 to the present,
with interest.

Please advise me within twenty days of the steps you have
taken or propose to take with respect to the foregoing matter.

I look forward to your reply.

Sincerely,