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Merger of 2 welfare funds


Guest JD698
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Guest JD698

Can two Taft-Hartley funds (one providing dental and optical benefits and the other providing health, prescription, life and accidental death and dismemberment benefits) be merged?

Can the funds of one plan be transferred from one plan to the other?

Both are funded solely through employer contributions.

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The easy answer is yes they can be merged or assets (and liabilities) be transferred from one plan to another. The harder question is should they be merged? Some issues are:

What does the Collective Bargaining Agreement ("CBA") provide? Would the merger violate any of its provisions?

Would such a merger or transfer violate the fiduciaries' duties under ERISA? (Is it prudent? Would it benefit one group to the detriment of another?)

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