Foundry pension changes and the 1973 agreement

P/OPINION   77-38

                                                 211(c)(1)
                                                 306(c)(1)

                        May 11, 1977


Dear

This is in response to the letter from you and Mr. (x) of
(named) Company requesting an advisory opinion regarding
certain provisions of the Employee Retirement Income
Security Act of 1974 (ERISA) as they relate to several
matters collectively bargained between the (Union) and
(named) Company.

You represent in your letter and the memorandum enclosed
therewith that in 1973 the (Union) and (named) Company
agreed upon a 6-year retirement agreement which contained
certain provisions which you state are "supplementary or
special plan provisions" within the meaning of ERISA
section 211(c)(2). After bargaining in 1976, the two
parties agreed to the following:

       a. An increase in the Special Age 65 Benefit
          effective November 1, 1976;

       b. An increase in the percentage benefit of the
          surviving spouse of an employee retiring on or
          after November 1, 1976;

       c. An extension of the foundry service bonus to
          2,000 foundry skilled trades employees out of
          149,676 employees participating in the plan; and

       d. Payment of a one-time lump sum from company
          assets to employees retiring before September 14,
          1976, who are eligible to receive benefits as of
          January 1, 1978.

The foundry service bonus and the lump sum payments in the
1976 agreement were made conditional upon securing a
satisfactory ruling from the Department of Labor.

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P/OPINION   77-38

Specifically, you request an advisory opinion that these
1976 agreements do not constitute a termination of the
1973 retirement agreement under sections 211(c) and 306(c)
of ERISA.

Section 306(c)(1) provides that the minimum funding
standards of Part 3 of Title I of ERISA shall not apply to
any plan in effect on January 1, 1974, pursuant to a
collective bargaining agreement until the earlier of the
dates specified in section 211(c)(1)(A) or (B). Section
211(c)(1) provides that such plans will not be treated as
not meeting the requirements of sections 204 and 205
solely because of a supplementary or special plan provi-
sion for any plan year before the year which begins after
the earlier of the date on which the last collective
bargaining agreement relating to the plan terminates or
December 31, 1980.

Your letter does not contain sufficient information
concerning the Plan's provisions regarding supplementary
lifetime benefits to determine whether such provisions
constitute a "supplementary or special plan provision"
within the meaning of section 211(c)(2) of ERISA.
Accordingly, we cannot issue any opinion in response to
your request in that regard.

The statute does not define what constitutes termination
of a collective bargaining agreement relating to a plan
for purposes of section 211(c). However, a House Ways and
Means Committee Report (House Report 93-807, p. 51-52)
stated such an agreement "... will not be considered
terminated if it can be (or is) reopened with respect to
narrow issues only. For example, a collective bargaining
agreement would not be considered as being terminated for
this purpose if it can be reopened with respect to the
benefit payable to a surviving spouse, if it can be
reopened because of a change in payments with respect to
voluntary coverage under Part B of the Medicare Benefits
under the Social Security Act or if it can be reopened to
increase benefits with respect to a quite limited group of
employees." The Conference Committee Report on ERISA
(House Report 93-1280, p. 267) incorporated these
statements by reference.

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P/OPINION    77-38

Based on your representations, the supplementary material
enclosed with your letter, and the intent of the Congress
as shown in the Committee Reports, we conclude that the
1976 agreements on the Special Age 65 Benefit and the
increased surviving spouse benefit do not constitute a
termination of the 1973 retirement agreement. Similarly,
the extension of the foundry service bonus under the 1976
agreement will not constitute a termination of the 1973
retirement agreement because it merely increases "...
benefits with respect to a quite limited group of
employees." Lastly, the agreement for (named) Company to
pay a lump sum to certain retirees will not constitute a
termination of the 1973 retirement agreement because it in
any event deals with a narrow issue within the meaning of
the legislative history cited above.

Notwithstanding the above, this letter should not be
deemed to be an opinion of the Department as to whether
section 211(c) applies to the Plan. In this regard, we
are issuing no opinion herein as to whether the agreements
mentioned in your letter constitute "collective bargaining
agreements" for purposes of section 211(c)(1) of ERISA or
whether the Plan's participation and vesting rules in
effect on the date of enactment of ERISA were not less
favorable to participants, in the aggregate, than the
rules provided under sections 202, 203, and 204 of ERISA.

Because sections 211(c) and 306(c) have parallel
provisions in ERISA section 1017(c), which is under the
jurisdiction of the Internal Revenue Service, we have
conferred with representatives of the Service and they
have indicated their concurrence in the views set forth
above as they apply to that section.

Sincerely,