Insurance renewal commissions outside pension plan definition

P/OPINION 76-09


                                                                3(2)


                        February 10, 1976


Dear              :

This is in reply to your letter concerning your rights
under the Employee Retirement Income Security Act of
1974 (ERISA) with respect to renewal commissions on life
insurance policies sold by you. We regret that we were
unable to reply to your inquiry earlier.

You state that the renewal commissions constitute a
deferred income and it is your understanding that such
deferred income constitutes a pension benefit plan
under the ERISA; therefore, full vesting of the renewal
commissions would be required after a fifteen-year period,
at the latest.

Although section 3(2) of the ERISA provides that a plan,
fund or program established or maintained by an employer
which by its terms results in a deferral of income by
employees for periods extending to the termination of
covered employment or beyond constitutes an employee
pension benefit plan, the renewal commissions from the
sale of insurance policies do not result in a deferral of
income within the meaning of section 3(2) since the
seller is not entitled to receive the commissions until
the premium for the policy is paid. Therefore, the renewal
commissions do not constitute an employee pension benefit
plan within the contemplation of the ERISA and its provisions
do not apply to such commissions.

Sincerely,