Multiemployer plan administrator's ability to charge employer fees

[Guest cdettmer]

Is it acceptable for a Multiemployer Plan to charge Employers who fail to respond to requests for participant (employee) information a fee for failure to comply with the request? Is anyone using this administrative practice? Or does anyone know of any restrictions that would prevent its use? Thanks in advance for your help.

[Bill Ecklund]

It depends on what the plan documents say. If the trustees have adopted rules and regulations providing for such penalties, and if the collective bargaining agreement does not restrict the right of the trustees to do so, then yes the trustees may impose a penalty for failure to respond. The penalty would have to be resonable and bear some relationship to the damage incurred by the fund for the delay.

[KJohnson]

I think Bill is right that if you want this to be enforceable, you have to get it back to the collective bargaining agreement in some manner. Thus, if the rule is in the Plan and the Plan is incorporated by reference in the CBA it would be enforceable. If the CBA incorporates the Plan, the Plan gives the Trustees the right to make "rules" which are then binding on everyone who deals with the Plan, you may have problems, but at least the Plan would have an argument that is enforceable.

I don't think that you would be going in under ERISA to enforce these provisions, it would be more of a 301 Taft-Hartley action for breach of a collective bargaining agreement.

The most analagous thing I can think of is a liquidated damages claim in late contributions where the principle amount has already been paid. A number Courts have said that there is no ERISA action because ERISA only gives you liquidated damages on "delinquent contributions" and there are no delinquent contributions. However, they have allowed actions to go forward for breach of a CBA under Section 301 as long as the liquidated damages are not "penalties" (i.e. reasonable estimate of the damages to the Plan by the delinquent contributions).