Borg & Beck pension pattern bargaining

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




August 8, 1977

Mr. W. A. Garner                                          OPINION 77-51 A
Manager of Employee Benefits
Borg & Beck Division                                      211(c)(1)
Borg-Warner Corporation
[Recipient address omitted]

Dear Mr. Garner:

This is in reply to your letter requesting our confirmation of your
interpretation of section 211(c) of the Employee Retirement Income
Security Act of 1974 (ERISA) that, based on the facts set forth in
your letter, the Wage Employees' Pension Plan (the Plan) is "a plan
maintained on January 1, 1974 pursuant to a collective bargaining
agreement" which is still in effect.

Your letter contains the following facts and representations: The
benefits provided by the Plan have historically been patterned after
the plan maintained pursuant to the collective bargaining agreement
between General Motors Corporation and the UAW. This pattern has
existed since 1950. Since 1950 there have been 11 negotiations between
Borg & Beck Division and the UAW. All negotiations have been within
6 months of similar negotiations between General Motors and the UAW.

In 1973, General Motors and the other two major automobile manufacturers
introduced a 6-year pension agreement containing a supplementary lifetime
benefit for certain employees which benefits commence at age 65. You
believe that this benefit is a "supplementary or special plan provision"
within the meaning of section 211(c)(2) of ERISA. Borg & Beck Division,
consistent with the foregoing pattern, agreed to include this supplement
in the Plan on March 1, 1974, as part of a 6-year pension collective
bargaining agreement.

                                                     OPINION 77-51 A

                                  -2-

You believe that Borg & Beck's long standing tradition of pattern
bargaining with the UAW, compels the determination that the Plan
containing such provisions was maintained on January 1, 1974. The
UAW staggers its negotiations with the major autoworkers and their
suppliers. The major autoworkers pension collective bargaining
agreement, which Borg & Beck had traditionally followed, was entered
into prior to January 1, 1974. You believe that, if it is concluded
that the Plan is not deemed to be maintained on January 1, 1974
pursuant to the collective bargaining agreement still in effect, the
result would be inequitable and would disrupt orderly and historical
collective bargaining relationships.

Section 211(c) of ERISA provides that:

     (c)(1) In the case of a plan maintained on January 1, 1974,
     pursuant to one or more agreements which the Secretary finds
     to be collective bargaining agreements between employee
     organizations and one or more employers, no plan shall be
     treated as not meeting the requirements of sections 204 and
     205 solely by reason of a supplementary or special plan
     provision (within the meaning of paragraph (2)) for any
     plan year before the year which begins after the earlier of --
        (A) the date on which the last of such agreements
        relating to the plan terminates (determined without
        regard to any extension thereof agreed to after the
        date of the enactment of this Act), or
        (B) December 31, 1980.

     For purposes of subparagraph (A) and section 306(c),
     any plan amendment made pursuant to a collective
     bargaining agreement relating to the plan which amends
     the plan solely to conform to any requirement contained
     in this Act or the Internal Revenue Code of 1954 shall
     not be treated as a termination of such collective
     bargaining agreement. This paragraph shall not apply
     unless the Secretary determines that the participation
     and vesting rules in effect on the date of enactment
     of this Act are not less favorable to participants,
     in the aggregate, then the rules provided under sections
     202, 203, and 204.

                                                      OPINION 77-51 A

                                  3


     (2) For purposes of paragraph (1), the term "supplementary
     or special plan provisions" means any plan provision which --
        (A) provides supplementary benefits, not in
        excess of one-third of the basic benefit, in
        the form of an annuity for the life of the
        participant, or
        (B) provides that, under a contractual agreement
        based on medical evidence as to the effects of
        working in an adverse environment for an extended
        period of time, a participant having 25 years of
        service is to be treated as having 30 years of
        service.

     (3) This subsection shall apply with respect to a
     plan if (and only if) the application of this sub-
     section results in a later effective date for this
     part than the effective date required by subsection
     (b).

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.

In regard to your question with respect to whether the Plan was
maintained on January 1, 1974 pursuant to a collective bargaining
agreement which is still in effect, it is our opinion that, on the
basis of the representations in your letter of April 18, 1977 as to
all the facts and circumstances surrounding the agreement of March 1,
1974, the action taken by Borg & Beck Division with respect to the
patterned bargaining of certain supplementary lifetime benefits relates
back to the pre-1974 pattern agreement for purposes of section 211(c)(1)
of ERISA. It should be noted that this opinion is limited to the facts
and circumstances of this request and should not be interpreted as
implying, as a general proposition, that later patterned bargaining
will be deemed to be concluded at the same time as the agreement of
the pattern setter for purposes of the applicability of any ERISA
provisions.

                                                      OPINION 77-51 A

                                  4


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.

This letter constitutes an advisory opinion as defined in ERISA
Procedure 76-1 (copy enclosed). Accordingly, this letter is issued
subject to the provisions of such procedure, including section 10
thereof relating to the effect of advisory opinions.

Sincerely,



Fred M. Stuckwisch
Director
Office of Regulatory Standards
  and Exceptions

Enclosure