Multiemployer vacation benefit plan

[Lori Friedman]

Facts: A labor union provides a vacation plan for its members. Pursuant to collective bargaining agreements, contracting employers contribute:

(1) annual vacation pay, and

(2) the employer's share of FICA

to the plan. Union members receive their vacation pay net of FICA tax withholding. At year-end, the union reports each member's vacation benefit on Form W-2.

I believe that this arrangment is an ERISA welfare benefit plan, as defined in 29 USC 1002(1)(A). The plan provides a benefit described in LMRA Sec. 302(a). I also believe that the plan is required to file an annual Form 5500. There's no trust, which should be irrelevant; an ERISA welfare benefit can include any plan, fund, program, or other arrangement.

Any thoughts about this matter? Thank you.

[mal]

Absent a trust and joint board of trustees, you look to have an LMRA problem.

I would recommend you look at the instructions to the 5500 form. I know that a Union which provides health benefits out of it's general assets generally does not need to file a 5500. When the payments are negotiated and being held for the benefit of the members, it would seem a 5500 would be in order.

[Don Levit]

Advisory Opinion 2004-08A from the DOL may be helpful. Go to http://www.dol.gov/ebsa/regs/aos/ao2004-08a.html.

I can also fax the opinion to you.

Don Levit