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City pension plan as a governmental plan
Summary DOL concluded that the described city employee pension plan was a governmental plan because the city established and maintained it. The plan was exempt from ERISA Title I requirements, including its reporting, vesting, funding and fiduciary rules. DOL noted that separate federal tax qualification rules may still apply. The answer concerns the plan and facts described in the letter.
Document
Federal opinion letter
Agency
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Document number
P/OPINION 77-14
Date issued
January 11, 1977
Status
Unknown
EBSA's index does not mark withdrawn or superseded opinions; still posted on dol.gov as of 2026-10-26.
Status last verified October 26, 2026
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About this page: The full text below is the official document from U.S. Department of Labor, Employee Benefits Security Administration (EBSA). Ezel adds the plain-English summary and tracks the document's status. The official source linked on this page is authoritative for any reliance.
P/OPINION 77-14
3(32)
January 11, 1977
Dear :
Thank you for your letter dated May 6, 1976, requesting a
determination of the status of the City of (named)
Employees Pension Plan and Trust under the Employee
Retirement Income Security Act of 1974 (ERISA). (City), a
political subdivision of (State), is the sole contributor
to the Plan, which is managed by a Board of Trustees
appointed by the City Council. We regret the delay in
responding to your inquiry.
Section 4(b)(1) exempts governmental plans from coverage
under title I of the ERISA. Section 3(32) defines a
governmental plan as 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. Since the City of (named) Employee Pension
Plan was established and is maintained by (City), a
political subdivision of (State), it is concluded that the
plan is a governmental plan and is exempt from coverage
under title I. The Plan is not subject to any of the
requirements of title I, including the reporting and
disclosure, participation, vesting, funding and fiduciary
requirements.
However, even though a governmental plan is exempt from
coverage under title I, many of the tax provisions of
title II (which are administered by the Internal Revenue
Service) may apply. For example, governmental plans may
qualify under section 401(a) of the Internal Revenue Code
in order to attain special tax treatment for employees who
participate under such types of plans. Although a governmental
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
401(a)(3) of the Code, the nondiscrimination rule of
section 401(a)(4), and the vesting provisions of section
401(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,
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