Advisory Opinion

April 12, 1996

Mr. Dana A. Yealy 
Federal Home Loan Bank of Pittsburgh
601 Grant Street
Pittsburgh, Pennsylvania 15219


Dear Mr. Yealy:

This is in reply to your request for an advisory opinion regarding the applicability of Title I of the Employee Retirement Income Security Act of 1974 (ERISA). Specifically, you ask whether the Federal Home Loan Bank of Pittsburgh (the Bank) is a governmental entity described in section 3(32) of Title I such that any employee benefit plans established or maintained by the Bank for its employees would be excluded from coverage under that title.1

You advise that the Bank was created by the Congress of the United States as one of the Federal Home Loan Banks (FHL Banks) that make up the Federal Home Loan Bank System (the FHLB System), which is intended to provide funding for members2 to undertake community-oriented mortgage banking (12 U.S.C. § 1430); to establish a program to subsidize interest rates on advances to members engaged in long-term lending for low and moderate income, owner-occupied and rental housing (12 U.S.C. § 1430); and to assist members in the event of severe financial conditions (12 U.S.C. § 1436). The FHLB System has the power to borrow money (12 U.S.C. § 1430) and make advances to members (12 U.S.C. § 1431). The FHLB System is permitted by Federal statute to issue, subject to the approval of the United States Treasury (31 U.S.C. § 9108), consolidated notes and bonds that are its primary funding source. Debt instruments issued by the FHLB System are priced comparably to federal agency obligations. Interest paid is tax exempt (12 U.S.C. § 1433). The FHLB System has direct support from the United States Treasury for up to $4 billion. However, FHLB System obligations specifically state that they are not debts of the U.S. Government.

The FHLB System is subject to substantial control by the Federal Housing Finance Board (the FHFB). Four members of FHFB are appointed by the President of the United States and confirmed by the Senate for seven-year terms. The fifth member of the Board is the Secretary of Housing and Urban Development, who is also appointed by the President and confirmed by the Senate. The FHFB appoints some of the members who serve on the Board of Directors of each FHL Bank.3 In addition, the FHFB approves the annual capital and operating budgets of an FHL Bank (12 C.F.R. § 934.6); approves the selection and compensation of an FHL Bank's officers and employees (12 U.S.C. § 1432(a)); approves its acquisition of offices and properties (12 U.S.C. § 1432(a)); approves the declaration of dividends (12 C.F.R. § 932.3); has the power to remove an FHL Bank director, officer or employee for cause (12 U.S.C. § 1422b(a)(2)); and may liquidate and reorganize an FHL Bank at its discretion (12 U.S.C § 1446).

FHL Banks are identified as "mixed ownership Government corporation[s]" and "Government corporation[s]" in the Government Corporations Act (31 U.S.C. § 9101). An FHL Bank assesses members for its administrative expenses (12 U.S.C. § 1438), and any operating surplus generated through assessments reduces members' future assessments.

Section 4(b)(1) of Title I of ERISA excludes governmental plans from coverage under that title. The term "governmental plan" is defined in section 3(32) to include, among others, "any plan established or maintained for its employees by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing."

Based on the information you submitted, it is the position of the Department of Labor that the Bank is an entity described in section 3(32) of Title I of ERISA - i.e., an agency or instrumentality of the Government of the United States. The Bank is a "mixed ownership Government corporation" over which the U.S. Government exerts substantial, although not total, control, including selection of its Board members, approval of its finances and operations, and control over the continuance of its existence. The degree of governmental involvement in the operation of the Bank cannot be considered merely regulatory, even in such a highly regulated trade or industry as banking. Therefore, any employee benefit plan established or maintained by the Bank for its employees would be a governmental plan within the meaning of section 3(32) and would, therefore, be excluded under section 4(b)(1) from coverage under that title.

This letter constitutes an advisory opinion under ERISA Procedure 76-1. Accordingly, it is issued subject to the provisions of the procedure, including section 10 thereof relating to the effect of advisory opinions.


Chief, Division of Coverage
Office of Regulations
and Interpretations


  1. You advise that the Bank currently offers a number of programs to its employees including a thrift plan, a supplemental thrift plan, group health indemnity insurance, participation in a health maintenance program, life insurance, long-term disability benefits, health care flexible spending accounts, and severance pay. The programs are funded in varying degrees by the Bank's contributions and employee contributions.
  2. Members of a Federal Home Loan Bank subscribe to stock in that bank and are limited to building and loan associations, savings and loan associations, insurance companies engaged in the mortgage business, savings banks, or any other insured depository institution located in the region served by that Federal Home Loan Bank.
  3. The remainder of each Board of Directors are elected by the members of that FHL Bank.