DOL Sues IAM National Pension Fund, Trustees
The Department of Labor (DOL) has filed suit
against the International Association of Machinists National Pension Fund (IAMNPF) and its board of trustees for multiple violations of ERISA. The DOL seeks a court order requiring the defendants to restore any losses the fund suffered due to the alleged violations and requiring the fund to implement reforms to prevent future ERISA violations.
The suit involves a sizable plan
. The IAMNPF plan is the 5th largest U.S. multiemployer pension fund; it has assets of nearly $11 billion and more than 1,750 contributing employer locations, pays pension benefits to more than 90,000 retirees and their beneficiaries, and has more than 100,000 active participants.
The DOL suit came after an investigation in which the DOL’s Employee Benefit Security Administration (EBSA) found that the IAMNPF trustees breached their fiduciary duties by:
- failing to loyally and prudently select fund service providers, including consultants and fund investment managers;
- regularly ignoring required procedures included in the fund’s governing plan documents;
- creating conflicts of interest for the fund;
- unlawfully soliciting and accepting gratuities from plan service providers; and
- spending, and permitting others to spend, fund assets lavishly on unnecessary trips, parties and extravagant food, wine and accommodations.
Michael Schloss, acting director of EBSA’s Philadelphia Region, said in a press release that the suit “clearly shows how the fund and its trustees shirked fiduciary responsibilities to the detriment of pension fund participants,” adding that the DOL “will not tolerate when fiduciaries fall short of their legal obligations, and will take every necessary action to hold them accountable.”