Agency distribution of reciprocal welfare fund contributions

P/OPINION   76-130

                                                 403(c)(1)
                                                 404(a)(1)
                                                 406
                     December 13, 1976



Dear          :

This will supplement our letter to you dated August 6,
1976, and will serve to answer your inquiry concerning the
Employee Retirement Income Security Act of 1974 (ERISA).
Again, we regret that we were unable to respond to your
inquiry earlier.

You state that you are the attorney for (A) Local #   ,
(City, State), and this organization maintains a welfare
fund that provides hospital, medical, surgical and life
insurance benefits to members. The plan is funded through
the contributions of members' employers on a cents-per-
hour-worked basis. Several of the participants in this
plan performed work for employers who have entered into a
collective bargaining agreement with (B) Local # . (B)
Local, in addition to a similarly funded welfare plan,
maintains a "security benefit fund" paying benefits for
vacations, jury duty, savings, etc., and these employers
have contributed to both programs on behalf of the (A)
Local members. Pursuant to a reciprocal agreement, (B)
Local has remitted such contributions to (A} Local.

You further state that, as (A) Local does not maintain a
"security benefit fund", the trustees of the (A) Local
welfare fund are uncertain as to what disposition they
should make of the contributions made on behalf of (A)
Local members to (B) Local's "security benefit fund". The
trustees are willing to send the contributions back to the
(B) Local fund for distribution to those members of (A)
Local on whose behalf the contributions were made.
However, the (B) Local fund trustees are unwilling to
incur the administrative expense involved in such a
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P/OPINION    76-130


distribution. You ask whether or not it would be
permissible under Title I of the ERISA for the (A) Local
welfare fund to make distribution of these contributions
to the affected members.

There is nothing in the provisions of Title I of the ERISA
that would prohibit the trustees of the (A) Local Welfare
Fund, acting as agent for the trustees of the (B) Local
Welfare Fund-Security Benefit Fund, from distributing to
entitled (A) Local members, contributions made on behalf
of such members by employers contributing to the (B) Local
"security benefit fund".

Sincerely,