Redeemable annuity contracts still covered by ERISA

P/OPINION 76-112

                                                   3(2)


                       September 30, 1976


Dear             :

This is in reply to your letter dated February 18, 1975,
requesting an opinion as to whether the tax deferred
annuities of (named) are covered plans under section 4(a)
of the Employee Retirement Income Security Act of 1974
(ERISA). Section 7.01 of both of (named)'s contracts
permits an employee to terminate his annuity agreement and
redeem the contribution at will.

Section 3(2) of the ERISA defines an "employee pension
benefit plan" and "pension plan" as "any plan, fund, or
program which was heretofore or is hereafter established
or maintained by an employer . . . to the extent that by
its express terms or as a result of surrounding circum-
stances such plan, fund or program -

       (A)   provides retirement income to employees, or

     (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." Although the tax deferred
annuities of (named) do permit an employee to terminate
his annuity agreement and redeem the contribution at will,
the contracts provide in section 6 for effecting a
retirement annuity or effecting a variable annuity.
Section 8, Death Benefits, gives a beneficiary the option
of selecting a retirement annuity or a variable annuity.
The plans, therefore, provide retirement income or a
deferral of income for periods extending to the
termination of covered employment or beyond.    The fact
that participants may choose not to do this would have no
bearing on coverage. In view of the foregoing, both plans
are covered under the ERISA.

Sincerely,