High school district retirement plans and ERISA filing

P/OPINION   76-129
                                                 3(32)
                     December 10, 1976



Dear          :

Thank you for your letter dated May 11, 1976, requesting a
determination under the Employee Retirement Income
Security Act of 1974 (ERISA). I am sorry we could not
reply sooner.

According to your letter and your conversation with a
member of my staff, education in (State) is a State
function and the (named) high School District (District)
is a subsidiary of the State. The District and its
employees contribute to two State retirement plans - the
State Retirement System for Classified Employees and the
State Teachers Retirement System for Certified Employees.
You seek confirmation that the District is exempted from
filing Form EBS-1.

Section 4(b)(1) of the ERISA exempts governmental plans
from coverage thereunder. Section 3(32) defines the term
"governmental plan", in part, to mean a plan established
or maintained for its employees by the Government of the
United States, by the government of any State or political
subdivision thereof, or by any agency or instrumentality
of any of the foregoing.

Based on the above, it is concluded that the plans are
established and maintained for its employees by the
District, an agency or instrumentality of (State).
Accordingly, they are "governmental plans" as defined in
section 3(32) of the ERISA and are exempt from coverage
under title I pursuant to the provisions of section
4(b)(1). The plans need not file Form EBS-1.


However, even though a governmental plan is exempt from
coverage under title I, many of the tax provisions of
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P/OPINION    76-129

title II (which are administered by the Internal Revenue
Service) may apply. For example, governmental plans may
qualify under section 40l(a) of the Internal Revenue Code
in order to attain special tax treatment for employees who
participate under such types of plans. Although a govern-
mental plan does not have to meet the alternative minimum
participation, vesting and funding requirements added to
the Code by title II, in order to attain qualified status,
it must satisfy the coverage requirements of section
40l(a)(3) of the Code, the nondiscrimination rule of
section 40l(a)(4), and the vesting provisions of section
40l(a)(7), as in effect prior to the enactment of the
ERISA. In addition, qualified governmental plans must
satisfy the requirements of section 415 of the Code
relating to contributions or benefits.


Sincerely,