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Labor Organization Savings and Retirement Plans

A labor organization is not exempt under Code section 501(c)(5) if its principal activity is to manage savings or investment plans, including pension or other retirement savings plans or programs.  This prohibition does not apply, however, to an organization that--

  1. Is established and maintained by another section 501(c)(5) labor organization;
  2. Is not directly or indirectly established or maintained by one or more--
    a.  Employers,
    b.  Governments (or agencies or instrumentalities thereof), or
    c.  Government controlled entities;
  3. Is funded by dues from members of the labor organization that established or maintained it; and
  4. Has not permitted or accepted employer contributions at any time after the enactment of the Employee Retirement Income Security Act (September 2, 1974).

Return to Life Cycle of a Labor Organization

Page Last Reviewed or Updated: 23-Apr-2014