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Restricted withdrawals and pension plan coverage
Summary A savings bank argued that liberal withdrawals kept its incentive savings plan outside ERISA’s pension definition. DOL found the handbook discouraged withdrawals and suspended contributions for three to twelve months after certain withdrawals. It concluded the described plan deferred income to termination or beyond and was subject to ERISA reporting and disclosure duties.
Document
Federal opinion letter
Agency
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Document number
P/OPINION 76-07
Date issued
January 26, 1976
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EBSA's index does not mark withdrawn or superseded opinions; still posted on dol.gov as of 2026-10-26.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 76-07
3(2)
January 26, 1976
Dear :
This is in reply to your letter of January 29, 1975,
requesting a ruling on the applicability of the reporting
and disclosure requirements of the Employee Retirement
Income Security Act of 1974 (ERISA) to the Incentive Savings
Plan of The Savings Bank (Plan). You contend that
the Plan does not fit within the definition of an employee
pension benefit plan because the liberal withdrawal provisions
of the Plan make the benefits available at any time a participant
chooses, before retirement. The Plan was not covered under the
Welfare and Pension Plans Disclosure Act (WPPDA).
As you state in your letter, coverage under the ERISA is of
broader scope than under the WPPDA. The definition of
"an employee pension benefit plan" and "pension plan"
includes "any plan, fund, or program which was heretofore
or is hereafter established or maintained by an employer
or by an employee organization, or by both, to the extent that
by its express terms or as a result of surrounding circumstances
such plan, fund or program .....(B} 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 from the plan." The Plan does satisfy
the definition of "an employee pension benefit plan”.
Although the withdrawal privileges in the Plan are liberal, the
employee Handbook clearly states that withdrawals are intentionally
discouraged (pages 4 and 9) and there are penalties imposed;
i.e., employee contributions will not be accepted for a period
of from three to twelve months depending on which portion
of vested money is withdrawn and to what extent. The Plan
P/OPINION 76-07
does result in "...a deferral of income by employees
for periods extending to the termination of covered employment
or beyond,...". Therefore, the Incentive Savings Plan of
The Savings Bank is covered under the ERISA and is
subject to its reporting and disclosure requirements.
Sincerely,
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