Plan Is Not Employee Benefit Plan Under ERISA: EBSA

from Spencer’s Benefits Reports: In Advisory Opinion 06A, the Department of Labor’s Employee Benefits Security Administration (EBSA) has found that the Hawaii Laborers’ and Employers’ Cooperation and Education Trust Fund (LECET Fund) is not an employee benefits plan under ERISA Sec. 3(1).

The LECET Fund was jointly established by the General Contractors Labor Association, the Building Industry Labor Association, and the Laborers International Union of North America, Local 368, AFL-CIO as of Dec. 1, 1993, pursuant to the Amended Trust Agreement Establishing the Hawaii Laborers’ and Employers’ Cooperation and Education Trust Fund. The LECET Fund is one of six funds that comprise the Hawaii Laborers’ Joint Trust Funds. The LECET Fund was established and is operated as a labor management cooperation committee under Sec. 302(c)(9) of the Labor Management Relations Act of 1947 (LMRA).

The LECET Fund’s purposes as stated in the trust agreement are as follows:

• to develop and implement programs, services, and activities designed to strengthen and enhance the labor management relationship, and organizational effectiveness of individual employers;

• to foster the general economic development and welfare of the construction industry which individual employers and employees represented by the union participate in, including, productivity, quality of workmanship, economy of operation within Hawaii’s construction industry;

• to promote area and industry wide labor-management relationship and cooperation as provided for by LMRA Sec. 302(c)(9);

• to improve the job security of employees who are covered by the collective bargaining agreement and to improve, in general, the job opportunities for these employees;

• to educate individual employers and the customers of the individual employers of the work of the fund; and

• to engage in any other lawful activities incidental or related to the accomplishment of these purposes.

EBSA noted that ERISA Sec. 3(1) defines the term “employee welfare benefit” plan as: Any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment, or vacation benefits, apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legal services, or (B) any benefit described in LMRA Sec. 302(c) (other than pensions on retirement or death, and insurance to provide such pensions).

Based on the information and representations provided by the LECET Fund, the EBSA noted that it does not appear that the LECET Fund provides any benefit included in ERISA Sec. 3(1)(A) or Sec. 3(1)(B). Even though Sec. 3(1)(B) includes plans formed under LMRA Sec. 302(c), the DOL stated that “ERISA does not incorporate as a covered benefit every arrangement” described in LMRA Sec. 302(c). Since the LECET Fund was not established for the purpose of providing, nor has it ever provided, any benefit described in ERISA Sec. 3(1), the EBSA found that the LECET Fund is not an employee benefit plan covered under ERISA Title I.

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