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Dear Mr. McNeil:
This responds to your request on behalf of Empresas
Fonalledas, Inc. (Empresas) for an advisory opinion concerning the
applicability of Title I of the Employee Retirement Income Security Act of
1974 (ERISA). Specifically, your inquiry relates to whether, in the case
of a plan covering a “controlled group of corporations” or a “group
of trades or businesses under common control” within the meaning of
section 414(b) and (c) of the Internal Revenue Code (Code), filing a
single registration statement for the plan will satisfy the alternative
method of compliance in 29 C.F.R. § 2520.104-23 for the participating
employers.
The Department has by regulation at 29 C.F.R. §
2520.104-23 provided administrators of certain pension plans maintained
for a select group of management or highly compensated employees
(so-called “top hat” plans) with an alternative method of compliance
with the reporting and disclosure provisions of Part 1 of Title I of ERISA.
A plan administrator of such a plan may comply with the reporting and
disclosure requirements under Part 1 by filing a registration statement
with the Secretary of Labor in accordance with the provisions of the
regulation and providing any plan documents requested by the Secretary.
The regulation describes the filing requirement as follows:
Filing a statement with the Secretary of Labor that
includes the name and address of the employer, the employer
identification number (EIN) assigned by the Internal Revenue Service, a
declaration that the employer maintains a plan or plans primarily for
the purpose of providing deferred compensation for a select group of
management or highly compensated employees, and a statement of the
number of such plans and the number of employees in each.
29 C.F.R. § 2520.104-23(b). This statement must be
filed within 120 days after the plan becomes subject to Part 1 of Title I
of ERISA.
This alternative method of compliance is available only
to employee pension benefit plans that are: (1) maintained by an employer
primarily for the purpose of providing deferred compensation for a select
group of management or highly compensated employees; and (2) for which
benefits (i) are paid as needed solely from the general assets of the
employer, (ii) are provided exclusively through insurance contracts or
policies, the premiums for which are paid directly by the employer from
its general assets, issued by an insurance company or similar organization
which is qualified to do business in any State, or (iii) both. 29 C.F.R.
§ 2520.104-23(d).
The term “employee pension benefit plan” is defined
in section 3(2)(A) of ERISA as “any plan, fund, or program which was
heretofore or is hereafter established or maintained by an employer or by
an employee organization, or by both, to the extent that by its express
terms or as a result of surrounding circumstances such plan, fund, or
program — (i) provides retirement income to employees, or (ii) results
in a deferral of income by employees for periods extending to the
termination of covered employment or beyond, regardless of the method of
calculating the contributions made to the plan, the method of calculating
the benefits under the plan, or the methods of distributing benefits from
the plan.”
The term “employer” is defined in section 3(5) of
ERISA to include “any person acting directly as an employer, or
indirectly in the interest of an employer, in relation to an employee
benefit plan; and includes a group or association of employers acting for
an employer in such capacity.” This definition encompasses persons
acting directly as employers, and also certain persons, groups and
associations that, while acting indirectly in the interest of or for an
employer in relation to an employee benefit plan, have no direct
employer-employee relationship with individuals covered under the plan.
In the Department’s view, there are circumstances
under which companies in a controlled group will be treated as maintaining
“separate plans” and circumstances under which a “single plan”
will be found to exist with respect to the controlled group as a whole. See
Advisory Opinion 84-35A (the Department would consider, among others, the
following factors in determining whether there is a single plan or several
plans in existence: (1) who established and maintains the plans, (2) the
process and purposes of plan formation, the rights and privileges of plan
participants, and (3) the presence of any risk pooling). See also
Advisory Opinion 82-17A; Advisory Opinion 83-21A. If a “single plan”
is found to exist, it is the Department’s view that 29 C.F.R. §
2520.104-23 requires the filing of only a single registration statement
for the plan rather than separate statements filed for each participating
employer.
The Department did not, in 29 C.F.R. § 2520.104-23,
specifically address, however, how the “employer” is to be identified
in the registration statement filed for a single plan of a controlled
group of corporations or a group of trades or businesses under common
control within the meaning of section 414(b) and (c) of the Code. Although
they are not necessarily the exclusive means by which the requirements of
29 C.F.R. § 2520.104-23 may be satisfied in the case of such plans, the
Department would accept the following as methods of compliance. The plan
administrator could identify each employer maintaining the plan on the
statement required to be filed under 29 C.F.R. § 2520.104-23(b). Where
one of the participating employers is the plan administrator, the plan
administrator could identify the employer that serves as the plan
administrator by name, EIN, and address. If a participating employer is an
authorized person from whom the Department may request plan documents
under 29 C.F.R. § 2520.104-23(b)(2), including documents regarding the
other participating employers, the statement could identify that
authorized employer as the “employer.” In cases where only one
participating employer is identified as the “employer,” the
registration statement should include some general identifying information
regarding the group of participating employers that maintain the plan. The
addition or removal of individual participating employers from the group
would not necessitate the filing of an updated registration statement as
long as the employer identified in the original registration statement
continues to be an employer of employees covered by the plan and continues
to be an authorized person from whom the Department could request
documents regarding the plan.
You have not asked, and we express no opinion as to
whether the proposed arrangement would in fact qualify as a plan
maintained for a select group of management or highly compensated
employees within the meaning of 29 C.F.R. § 2520.104-23. Such inquiries
are inherently factual in nature and generally will not be ruled upon by
way of advisory opinion. See Advisory Opinion 90-14A. Further, we
express no opinion as to whether the participating employers in the plan
you described would be deemed to be members of a controlled group of
corporations or of a group of trades or businesses under common control
within the meaning of section 414(b) or 414(c) of the Code. Interpreting
these provisions of the Internal Revenue Code is solely within the
jurisdiction of the U.S. Department of the Treasury/Internal Revenue
Service.
This letter constitutes an advisory opinion under ERISA
Procedure 76-1. Accordingly, it is issued subject to the provisions of
that procedure, including section 10 thereof relating to the effect of
advisory opinions.
Sincerely,
Lisa M. Alexander
Chief, Division of Coverage, Reporting and Disclosure
Office of Regulations and Interpretations
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