Community scholarship fund outside ERISA

P/OPINION 76-04

                                                            3(1)
                                                            3(4)
                                                            4(a)



                       April 22, 1976


Dear              :


This is in response to your request for a determination
of the status of the           Scholarship Fund (Fund)
under the Employee Retirement Income Security Act of
1974 (ERISA). You also request that if the Fund is deemed
to be covered under the ERISA, the Secretary of Labor
indicate an alternative method of compliance. The Fund
membership consists of all members of the            Counties
Labor Council, which is composed of representatives from
all county labor organizations affiliated with the AFL—CIO.
Your letter dated December 11, 1975, states that one of
the purposes of the Council is to provide a forum for the
peaceful resolution of jurisdictional disputes and assist
in labor negotiations.

The Fund annually awards four scholarships of $750 each with
the sole requirement that the recipient be a resident of
County. A fifth scholarship is awarded annually
to a           County high school senior who must be the
child of a person presently a member of a labor organization
affiliated with the           Counties Labor Council.

The term "employee welfare benefit plan" includes any plan,
fund or program established or maintained by an employee
organization for the purpose of providing scholarship funds
for its participants or their beneficiaries (section 3 (l)).
The term "employee organization" includes "any labor union
or any organization of any kind, or any agency or employee
representation committee, association, group, or plan, in
which employees participate and which exists for the purpose,
in whole or in part, of dealing with employers concerning an
employee benefit plan, or other matters incidental to
employment relationships;. . ." (section 3(4)). Also,
section 4(a) provides that Title I of the ERISA shall apply
to any employee benefit plan if it is established or maintained
by any employee organization or organizations representing
employees engaged in commerce or in any industry or activity
affecting commerce.
P/OPINION 76-04

Based on the information that the Council provides a
forum for the resolution of jurisdictional disputes, assists
in labor negotiations and is composed of representatives
from all county labor organizations affiliated with the
AFL—CIO, the Council is an employee organization within
the meaning of section 3(4). Since the Fund membership
consists of all members of the Council, the Fund also
would be an employee organization within the meaning of
section 3(4). However, the benefits provided (scholarships)
are primarily for the benefit of the whole community, not
for the benefit of the members of the employee organizations.
Only one of the scholarships is awarded to a beneficiary
of a member of a labor organization. The Fund, therefore,
would not be covered under section 4(a) because it is not
established or maintained for the purpose of providing
benefits for its participants or their beneficiaries.


Sincerely,