Discretionary IRA bonuses paid to employees

P/OPINION 77-21

                                                3(2)


                    February 9, 1977


Dear          :

Thank you for your correspondence regarding the Employee
Retirement Income Security Act of 1974 (ERISA). We regret
the delay in responding to your inquiry.

You state that you represent (named), Inc., a firm that
maintains a program under which a discretionary bonus is
paid to employees for deposit in their own Individual
Retirement Accounts (IRA) established under section 408(a)
of the Internal Revenue Code of 1954 (the Code). The
bonus amounts are paid directly to the employee who
reports them as earnings and forwards them to the trustee
who maintains the IRA. You request a determination that
this program is exempt from Title I of the ERISA which
includes the reporting and disclosure requirements.

Section 2510.3-2(d) of the enclosed regulations issued by
the Department of Labor on August 15, 1975, sets forth
circumstances under which an IRA established under section
408(a) of the Code will not be deemed a pension plan
within the meaning of section 3(2) of the ERISA. If such
an account is not deemed a pension plan, it will not be
covered under Title I of the ERISA.

As indicated in section 2510.3-2(d), an IRA will not be
deemed a pension plan if no contributions are made by the
employer, participation is voluntary, the sole involvement
of the employer is to permit the sponsor to publicize the
program and to collect contributions, and the employer
receives no consideration other than reasonable compensa-
tion for service rendered.

The involvement of (named), Inc., in the program you
describe is limited sufficiently for treatment under
section 2510.3-2(d). As the other conditions contained
therein are satisfied as well, this program will not be
deemed a pension plan and will, therefore, be exempt from
Title I of the ERISA.

Sincerely,



Enclosure