Advisory Opinion 1975-07

Dear :

This will confirm advice already given you orally that a program providing severance benefits not in excess of the maximum set forth in section 2310.3-2(b) of the regulations published on August 15, 1975 is a welfare plan even if benefits are paid from the employer’s general assets.

As you pointed out, section 2510.3-1(b) of the same group of regulations contains provisions distinguishing payroll practices from employee welfare plans, and relies in part on whether the benefits come from the general assets of the employer. This section does not, however, purport to make all payments from general assets into payroll practices, but only those benefits which fit the description in the regulations.