Only completely unfunded plans in which the plan benefits derive
solely from the general assets of a union 1 or employer, and
in which plan assets are not segregated in any way from the general
assets of a union or employer and remain solely within the general
assets until the time of distribution of benefits, shall be exempt from
the bonding provisions. As such, the language ``where such plan is one
under which the only assets from which benefits are paid are the general
assets of a union or of an employer'' shall not be deemed to exempt a
plan from the coverage of section 13 if the plan is one in which:
---------------------------------------------------------------------------
1For purposes of the exemption discussed in
Sec. 2580.412-2, the term ``union'' shall include ``* * * any
organization of any kind or any agency or employee representation
committee, association, group, or plan, in which employees participate
and which exists for the purpose in whole or in part, of dealing with
employers concerning an employee welfare or pension benefit plan, or
other matters incidental to employement relationships * * *'' (29 U.S.C.
302(a)(3)).
---------------------------------------------------------------------------
(a) Any benefits thereunder are provided or underwritten by an
insurance carrier or service or other organization, or
(b) There is a trust or other separate entity to which contributions
are made or out of which benefits are paid, or
(c) Contributions to the plan are made by the employees, either
through withholding or otherwise, or from any source other than the
employer or union involved, or
(d) There is a separately maintained bank account or separately
maintained books and records for the plan or other evidence of the
existence of a segregrated or separately maintained or administered fund
out of which plan benefits are to be provided.
As a general rule, the presence of special ledger accounts or accounting
entries for plan funds as an integral part of the general books and
records of an employer or union shall not, in and of itself, be deemed
sufficient evidence of segregation of plan funds to take a plan out of
the exempt category, but shall be considered along with the other
factors and criteria discussed above in determining whether the
exemption applies. Again, it should be noted, however, that the fact
that a plan is not exempt from the coverage of section 13 does not
necessarily mean that its administrators, officers or employees are
required to be bonded. As stated previously, this will depend in each
case on whether or not they ``handle'' funds or other property of the
plan within the meaning of section 13 and under the standards set forth
in Sec. 2580.412-6.
