UAW and General Motors pension bargaining changes

                     U.S. DEPARTMENT OF LABOR
                    Pension and Welfare Benefit Programs
                          Washington, D.C. 20216




Mr. John Fillion                                           OPINION 77-39 A
General Counsel
International Union, United                                211(c)(1)
 Automobile, Aerospace and                                 306(c)(1)
 Agricultural Implement Workers
 of America
[Recipient address omitted]

Dear Mr. Fillion:

This is in response to the letter from you and Mr. Eugene L. Hartwig
of General Motors Corporation (GM) 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 U.A.W. and GM.

You represent in your letter and the memorandum enclosed therewith
that in 1973 the U.A.W. and GM 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; and

  c.   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 l, 1978.

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

Specifically, you request an advisory opinion that these 1976 agreements
do not constitute a termination of the 1973 retirement agreement under
sections 2ll(c) and 306(c) of ERISA.

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Section 306(c)(l) 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 require-
ments of sections 204 and 205 solely because of a supplementary or
special plan provision 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.

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. Lastly, the agreement for GM 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

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                             - 3 -


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,



                                 Fred W. Stuckwisch
                                 Director
                                 Office of Regulatory Standards
                                   and Exceptions