Retirement plan fiduciaries may not sacrifice plan performance when using plan assets to either help or fight unions.
Robert Doyle, a director at the Employee Benefits Security Administration, comes to that conclusion in Advisory Opinion 2008-05A, which was written in response to a letter from David Chavern chief operating officer of the U.S. Chamber of Commerce, Washington.
Chavern asked EBSA, an arm of the U.S. Labor Department, whether the fiduciary rules of the Employee Retirement Income Security Act prohibit the use of plan assets to support union organizing and collective bargaining efforts.
“Fiduciaries may not, consistent with ERISA, increase expenses, sacrifice investment returns, or reduce the security of plan benefits in order to promote or oppose union organizing goals or collective bargaining objectives,” Doyle writes in the advisory opinion.
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“In addition, expenditures of plan assets to urge union representation of employees in the collective bargaining process or to promote a particular collective bargaining demand may constitute a prohibited transfer of plan assets for the benefit of a party in interest… and potentially an act of self-dealing,” Doyle warns.