Fiduciary Liability: MultiEmp Health Fund

[Guest meeh3704]

This involves a jointly-trusteed multiemployer health and welfare fund. I was wondering about the fiduciary implications for a participating employer when the employer refuses to pay a COLA adjustment when the bargaining agreement has expired and the employer kicks the employer out of the fund. I've researched the issue and found that there is at least an argument that a COLA increase is not a term and condition of employment and does not have to be maintained (not part of status quo). My question, however, is what happens if the Fund kicks the employer out of the plan rather than filing a NLRB claim? Obviously the employer would provide insurance under its own plan, but would there be any type of breach of fiduciary duty on the part of the employer for not paying the increase. More generally, are participating employers fiduciaries?

[Bill Ecklund]

This involves a jointly-trusteed multiemployer health and welfare fund. I was wondering about the fiduciary implications for a participating employer when the employer refuses to pay a COLA adjustment when the bargaining agreement has expired and the employer kicks the employer out of the fund. I've researched the issue and found that there is at least an argument that a COLA increase is not a term and condition of employment and does not have to be maintained (not part of status quo). My question, however, is what happens if the Fund kicks the employer out of the plan rather than filing a NLRB claim? Obviously the employer would provide insurance under its own plan, but would there be any type of breach of fiduciary duty on the part of the employer for not paying the increase. More generally, are participating employers fiduciaries?

Employers are generally not fiduciaries to a Fund. "Fiduciary" is defined in ERISA section 3(21)(A). Unless the employer is rendering investment advice, has discretion in asset management or discretion in plan administration, it would not be a fiduciary.