Advisory Opinion

March 30, 2000

Mr. Richard L. Davenport, F.S.A
Deloitte & Touche LLP
Chase Tower
2200 Ross Avenue, Suite 1600
Dallas, Texas 75201


Dear Mr. Davenport:

This responds to your request for an advisory opinion on behalf of the International Association of Firefighters, AFL-CIO/CLC Local 176 Board of Trustees, Tulsa Firefighters Health and Welfare Trust. You ask whether the Tulsa Firefighters Health and Welfare Plan (Plan) is excluded from Title I of the Employee Retirement Income Security Act of 1974 (ERISA) as a "governmental plan" within the meaning of section 3(32) of ERISA.

You represent that the Plan covers substantially all of the active employees of the City of Tulsa, Oklahoma (City) who are represented by the International Association of Firefighters, AFL-CIO/CLC Local 176 (Local 176), certain retirees of the City, and dependents. Prior to June, 1994, the Plan's participants were covered under the City's medical, dental and life insurance programs. Pursuant to collective bargaining negotiations and a Memorandum of Understanding between the City and Local 176 executed June 17, 1994 (Memorandum), the City agreed to allow Local 176 to withdraw from the City's medical, dental and life insurance programs and provide those benefits in a separate plan funded and operated under a trust created by Local 176. That trust is the Tulsa Firefighters Health and Welfare Trust (Trust) and its benefit program is the Plan at issue here. The affairs of the Trust are conducted by a seven-person board of trustees. Two trustees are members of the executive board of Local 176, four are elected at large by the Local 176 membership, and one is designated by the Mayor of the City of Tulsa and approved by the Tulsa City Council.

The Memorandum specified, among other things, that full-time employees of Local 176 may also participate in the Plan. You state that the Plan currently covers one such employee and that other individuals could become eligible for coverage in the future. In particular, you indicate that Local 176 might add a business manager and a secretary as full-time employees who would be covered by the Plan. With the exception of these three Local 176 employees, the Plan covers only current or retired employees of the City and their dependents. As of March 1999, there were 838 participants enrolled in the Plan. The Plan provides medical, dental and life insurance benefits to its participants in accordance with the collective bargaining agreement between the City and Local 176. The benefits are funded primarily by City contributions specified in the bargaining agreement, which amounted to approximately 78 percent of total contributions to the Plan for the plan year ending June 30, 1998. The remaining contributions are made by the Plan's participants, including the participant employed by Local 176. The bargaining agreement requires the City to wire its contributions directly to the Trust's bank account identified in the agreement.

ERISA section 4(b)(1) provides that Title I of ERISA does not apply to a "governmental plan" as defined in ERISA section 3(32). Section 3(32) of ERISA defines the term "governmental plan," in pertinent part, as "a 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."

The Department of Labor (Department) has previously concluded that section 3(32) of ERISA includes in the "governmental plan" definition not only plans established by the unilateral action of employers which are governmental entities, but also collectively bargained plans and plans jointly administered by trustees appointed by governmental entities and by labor unions if these plans are funded by, and cover only employees of, governmental entities. It is also the Department's view that participation by a de minimis number of private sector employees in an otherwise governmental plan will not adversely affect the plan's status as a governmental plan. However, if a benefit arrangement were to cover more than a de minimis number of private sector employees, the Department may not consider it a governmental plan under Title I of ERISA.

Your submission indicates that the Plan is maintained pursuant to a collective bargaining agreement between Local 176 and the City; the Plan is substantially funded by contributions from the City with the remaining contributions being made by the Plan's participants; the City appoints one member of the Trusts seven member Board of Trustees; and, except for the three employees of Local 176 discussed above, the Plan covers only employees and retired employees of the City (and their dependents). Based on this information, it is the view of the Department that the Plan is a "governmental plan" within the meaning of section 3(32) of ERISA, despite its inclusion of three non-governmental employees, particularly inasmuch as the activities of the non-governmental employees relate exclusively to representing the governmental employees in regard to aspects of their employment with their governmental employer. Accordingly, the Plan, as a "governmental plan" within the meaning of section 3(32), is excluded from ERISA Title I coverage by ERISA section 4(b)(1).

This letter constitutes an advisory opinion under ERISA Procedure 76-1, and is issued subject to the provisions of that procedure, including section 10 thereof concerning the effect of advisory opinions. This letter relates solely to the application of the provisions of Title I of ERISA and is not determinative of any particular tax treatment under the Internal Revenue Code.


John J. Canary
Chief, Division of Coverage, Reporting & Disclosure
Office of Regulations and Interpretations