| | 89-9 |
| | November 28, 1989 |
| | REFERENCE: |
| | 4021 Plans CoveredPlans Covered |
| | 4021(b) Plans Covered. Exclusions from CoveragePlans Covered. Exclusions from Coverage |
| | OPINION: |
| | I write in response to your request for the opinion of the Pension Benefit Guaranty Corporation ("PBGC") as to whether the |
| | Amended Pension Plan for Employees of * * * * * Company, a defined benefit plan maintained by the * * * * * Indian |
| | Community of the * * * * * Reservation in * * * * *, is covered by Title IV of the Employee Retirement Income Security |
| | Act of 1974 ("ERISA"). The facts as you have represented them in connection with your request are as follows. |
| | The Tribe is a native American Indian tribe. It has no treaty with the United States; the reservation was established by a |
| | series of Executive Orders. The Tribe recently bought a factory located outside the tribal reservation (but within the same |
| | state). It has continued to operate the factory and directly employs the factory's employees. Most of these employees |
| | are non-Indians. The employees are represented by a union. The factory's customers, at least some of which are in other |
| | states, are non-Indian, and the factory is run simply to make money for the Tribe. |
| | When the Tribe bought the factory, it assumed sponsorship of the plan, which is a qualified defined benefit pension plan. |
| | The Tribe intends to keep the plan qualified. The Tribe has no tribal rules or laws governing pension plans. It has |
| | acquiesced in the jurisdiction over the factory of the National Labor Relations Board and the Mine Safety and Health |
| | It is well-settled that "a general statute in terms applying to all persons includes Indians and their property interests." |
| | Federal Power Commission v. Tuscarora Indian Nation, 362 U.S. 99, 116, 80 S.Ct. 543, 553 (1960); accord, Spalding v. |
| | Chandler, 160 U.S. 394, 16 S.Ct. 360 (1896); cf. Mescalero Apache Tribe v. Jones, 411 U.S. 145, 93 S.Ct. 1267 (1973) |
| | (state tax law held applicable to a tribal ski resort business located outside the tribal reservation). In general, exceptions to |
| | this principle are made only where -- |
| | (1) the law touches "exclusive rights of self-government in purely intramural matters"; (2) the application of the law to the |
| | tribe would "abrogate rights guaranteed by Indian treaties"; or (3) there is proof "by legislative history or some other means |
| | that Congress intended [the law] not to apply to Indians on their reservations . . . ." |
| | Donovan v. Coeur d'Alene Tribal Farm, 751 F.2d 1113, 1116 (citation omitted); accord, Smart v. State Farm Insurance |
| | Company, 10 E.B.C. 2060 (7th Cir. 1989) (applying ERISA to a group insurance plan maintained by an Indian tribe for |
| | employees of a tribal health center). |
| | Under section 4021 of ERISA, Title IV applies generally to any tax-qualified defined benefit plan. Section 4021(b) lists |
| | exceptions to this general rule, but none of those exceptions applies to the plan in question here. Nor is there any |
| | indication in ERISA's legislative history that Congress intended to exclude Indian tribal plans from ERISA coverage. |
| | Furthermore, the Tribe has no treaty with which ERISA coverage would conflict, and nothing in the Executive Orders |
| | establishing the reservation forecloses ERISA coverage. Finally, the factory is an off-reservation operation, most of |
| | whose employees, and all of whose customers, are non-Indian; the factory is operated simply to generate income for the |
| | Tribe. In these circumstances, the operation of the factory and the maintenance of the pension plan for employees of the |
| | factory are not aspects of tribal self-government, and ERISA coverage will not interfere with tribal sovereignty. |
| | Accordingly, the PBGC has concluded that, in the circumstances presented by this case, Title IV of ERISA applies to the |
| | This case is significantly different from that presented in Opinion Letter 81-3, where the PBGC concluded that Title IV did |
| | not govern a pension plan for employees of a corporate council of elected governmental officials of several Indian tribes |
| | that was established to coordinate the distribution on Indian reservations of federal (and, to some degree, state and private |
| | charitable) funds. In Opinion Letter 81-3, for example, the activities covered by the plan were characteristically |
| | governmental, non-profit activities focused within the reservation. Here, in contrast, the operations of the factory are off- |
| | reservation commercial activities carried on to make a profit. |
| | This letter constitutes an initial determination by the PBGC that is subject to reconsideration under the PBGC's regulation |
| | on Rules for Administrative Review of Agency Decisions, 29 CFR Part 2606. A copy of that regulation is enclosed for |
| | your information. Any request for reconsideration must be filed with Carol Connor Flowe, General Counsel, PBGC, 2020 |
| | K Street, N.W., Washington, DC 20006, within 30 days after the date of this letter. |
| | We note that this letter is not a determination as to the applicability of Title II of ERISA to the subject plan or the situation |
| | described. Any inquiry relating to such a determination should be directed to the Internal Revenue Service. |
| | If you have any further questions about this matter, you may call Deborah C. Murphy of this office at 202-778-8820. |
| | Jeanne K. Beck |
| | Deputy General Counsel |