Multiemployer Welfare Fund

[LIBERTYKID]

Can a Welfare Fund discriminate in the amount of contributons in requires an employer to make on behalf of its eligible employees to pay for benefits? The Fund covers, in addition to the employees covered by a CBA, employees of the union and an apprenticeship fund, and the union and apprenticeship fund contribute less per hour for the same benefits.

[Bill Ecklund]

This could be a complicated answer depending on the facts and circumstances. Generally if the trustees are acting in a fiduciary capacity, the answer would be no. They have to act in the best interest of the participants and beneficiaries and charging one group more that another group without justification would not appear to be proper. However there can be contribution discrepancies as CBA's expire at different times and the game of catch-up is played. The related organizations should have participation agreements that may control the rates. In addition the fund may be experience rated, justifying charging one group more than another, although that can create some tax problems if the fund in self insured. Also the trustees may have been acting in a settlor capacity rather than a fiduciary capacity when they set the rates. Really not enough facts are known