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Regulation and Compliance > Federal Regulation > DOL

Labor Dept. Settles With Pa. Builders Group

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The U.S. Department of Labor has reached a settlement with a Pennsylvania trade group providing for $5 million in restitution for alleged breaches of fiduciary duties to the group’s health plans.

The DOL announced it has obtained a consent judgment in which the Pennsylvania Builders Association, a subsidiary and its trustees agreed to restore $5 million to the fund and pay a civil penalty of $500,000.

The judgment also permanently bars the trustees from using plan assets to pay royalties or licensing fees to the association, prevents the trustees from contracting with the subsidiary for administrative services in exchange for fees, and prohibits the use of trust assets for lobbying, the DOL says.

Trustees of the PBA, Lemoyne, Pa., also must receive 8 hours of fiduciary training annually over the next 5 years under terms of the agreement, the DOL says.

The suit charged that PBA received royalty payments, while the subsidiary received administrative fees. The royalties paid to PBA represented a percentage of the administrative fees paid by contributing employers of the group, the DOL said. The trustees allegedly misused plan assets to pay for royalties, administrative fees and political lobbying.

The trust provided health, life insurance, dental, vision and temporary disability benefits to 12,616 participants as of 2006.

The court action, Chao v. Pennsylvania Builders Association, was filed in the U.S. District Court for the Middle District of Pennsylvania.


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