Voluntary employee stock purchase plan outside ERISA

P/OPINION 76-12



                                                           3(2)
                                                           3(3)
                                                           4(a)


                        February 9, 1976
Dear        :
This is in response to your letter in which you inquired
about the application of the fiduciary provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
I regret that we have not been able to respond more
promptly, due to the large volume of inquiries received.
Specifically, you ask whether the plan discussed in your
letter is a pension or welfare plan as those terms are
defined in ERISA. You describe the plan as "a specimen
non-qualified employee stock purchase plan" offered by
          National Bank to various companies. Under the
plan described, an employee may voluntarily authorize
regular payroll deductions up to ten percent of his
salary. An employer may contribute an amount equal to a
percentage of the employee's contributions. The money
is invested in stock of the employing company at the
current market price. An employee may terminate membership
in the plan at any time by giving written notice to the
employer. Upon withdrawal, the participant will receive
certificates for stock purchases, or he will receive the
proceeds of the sale of his stock, whichever he requests.
Based on the facts as they have been presented, it appears
that the terms of the plan in question do not provide
any of the benefits described in section 3(1) of ERISA or
in section 302(c) of the Labor-Management Relations Act
of 1947, and therefore the plan is not an employee welfare
benefit plan.
An employee pension benefit plan is defined in section 3(2)
of ERISA as "...any plan, fund, or program...established
or maintained by an employer...that by its express terms
or as a result of surrounding circumstances 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..."
P/OPINION 76-12

Where the employee may terminate his participation in the
plan at any time, section 2510.3-1 of the regulations governing
plan coverage, published in the Federal Register on August 15,
1975, indicates that "if each employee has the right to
withdraw the balance in his or her account at any time, such
a payroll savings plan does not meet the requirements for
a pension plan set forth in section 3(2) of the Act and,
therefore, is not an employee benefit plan within the meaning
of section 3(3) of the Act." The terms of the subject stock
purchase plan, which permit withdrawal of a participant's
balance at any time, appear to be governed by the language
of that regulation.
Section 4(a) of the Act states that only employee benefit
plans within the meaning of section 3(3) are subject to
Title I of the Act. Therefore, the fiduciary responsibility
provisions of ERISA are not applicable to the plan described
in your letter.
Sincerely,