Compliance

Lack of Records Shifts Burden of Proof to Plan Sponsor

By Rebecca Moore editors@plansponsor.com | September 21, 2012
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September 21, 2012 (PLANSPONSOR.com) – A federal appellate court has ruled that an employer’s failure to keep adequate records shifts the burden of proof to the employer that it does not owe contributions to a multi-employer pension plan. 

The 1st U.S. Circuit Court of Appeals vacated a district court’s judgment that Ray Haluch Gravel Co. only owed contributions for one employee because that was the only employee for which the Central Pension Fund of the International Union of Operating Engineers and Participating Employers could show records that he was covered under the collective bargaining agreement (CBA).  

The court decided the only reasonable interpretation of the CBA is that an employer must remit benefit payments for each hour of work covered by the CBA. The pension fund claimed payments were missing for unidentified employees.   

The court noted that under the Employee Retirement Income Security Act (ERISA), “every employer shall .. maintain records with respect to each of his employees sufficient to determine the benefits due or which may become due to such employees.” The statute further provides that “[t]he employer shall furnish to the plan administrator the information necessary for the administrator to make the [required] reports.”