Concerns About Controlling Union Employees' Benefit Funds by the Carpenters Collection Agency, Youngstown, OH

GAO was asked to examine: (1) the legality and functions of the Carpenters Central Collection and Administrative Agency (CCA), a nonprofit Ohio corporation that collects fringe benefit contributions from building trade employees; and (2) the timeliness and effectiveness of the Department of Labor's investigation and reporting of CCA activities.

GAO found that Labor did not take aggressive action to require Health and Welfare Fund trustees to correct Employee Retirement Income Security Act (ERISA) violations identified in its investigations of CCA activities. As a consequence, CCA has continued to control and use union employee fringe benefit funds in violation of ERISA provisions that are designed to prevent such abuses. CCA collects and controls union membership fringe benefit payments by employers, which may violate the Taft-Hartley Act, because it does not meet the statutory requirements of a Taft-Hartley trust; specifically, GAO is not aware of any written agreement between CCA and employers. CCA trustees represent only the employees and, therefore, employers and employees are not equally represented in the administration of CCA funds. In addition, the agreements between CCA and the employee benefit plans do not ensure that employee payments will be used for the sole and exclusive benefit of employees.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Linda G. Morra Team: General Accounting Office: Human Resources Division Phone: (202) 512-7014