The U.S. Department of Labor (DOL) filed a lawsuit against the International Association of Machinists National Pension Fund and its board of trustees for multiple violations of the Employee Retirement Income Security Act (ERISA).
According to the DOL, an investigation by its Employee Benefits Security Administration (EBSA) found that the IAM National Pension Fund trustees breached their fiduciary duties by:
- Failing to loyally and prudently select fund service providers, including consultants and fund investment managers;
- Regularly ignoring required procedures included in the fund’s governing plan documents;
- Creating conflicts of interest for the fund;
- Unlawfully soliciting and accepting gratuities from plan service providers; and
- Spending and permitting others to spend fund assets lavishly on unnecessary trips, parties and extravagant food, wine, and accommodations.
The lawsuit is seeking a court order requiring the defendants to restore any losses suffered by the fund due to the alleged violations and requiring the fund to implement reforms to prevent future ERISA violations.“This case clearly shows how the fund and its trustees shirked fiduciary responsibilities to the detriment of pension fund participants,” says Michael Schloss, acting director of EBSA’s Philadelphia Region. “The department will not tolerate when fiduciaries fall short of their legal obligations, and will take every necessary action to hold them accountable.”