US - The US Department of Labor (DoL) has tightened its disclosure regime for money managers and consultants which do business with Taft-Hartley pension plans.
In what the legal community is referring to as another stab at union officials, the DoL maintains that its Office of Labor Management Standards (OLMS) “has received numerous questions related to the circumstances in which payments from a trust in which a union is interested are reportable on Forms LM-30 and LM-10.”
The Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) requires employers to disclose whether they provided anything of value to unions, union officials or employees, or labour relations consultants.“Previously, you only had to do it if it was General Motors, for example, making a payment to the UAW which covers their employees, so it was the employer/employee arrangement,” said a prominent Employee Retirement Income Security Act (ERISA) lawyer.
“But what they have done is interpret it in a manner so that “employer” means anyone who employs an employee.”
The DoL has said that it plans to examine employer, or LM-10 forms after it completes its push on union filed reports. A form LM-30 needs to be completed and submitted if a union official or employee is invited to events by an investment manager that deals with a trust in which the union is interested, states the DoL. However, if the “gift” has a value of US$25 or less, or the “gift” is sporadic or occasional and is given under circumstances unrelated to the union official’s status in a labour organisation, Form LM-30 is not required.
The DoL’s high level of prescription continues: An officer who is invited to a Christmas party, which is sponsored by the consulting firm of the benefit funds, in which the officer is a trustee must file an LM-30 form if the dinner costs more than $20. Furthermore, if the consulting firm is an employer, it would have to file a form LM-10 for each example over $25.
The guidelines, although issued by the OLMS also have substantial overlap with ERISA, which is under the jurisdiction of the Employee Benefits Security Administration, a separate DoL agency. This has raised questions over which agency has the power to enforce the disclosure policy.
A DoL spokesperson said: “The unions are subject to requirements of a different law and EBSA is aware of the proposed changes. It is just not our [EBSA’s] regulatory jurisdiction but that of OLMS.”
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