Joint Fund Provides No Individual Benefits, Thus Not ERISA-Covered Plan, DOL Says

A fund administered by a joint labor-management board of trustees but providing no benefits to individual participants or beneficiaries is not an employee welfare benefit plan under Section 3(1) of Title I of the Employee Retirement Income Security Act, the Department of Labor said in an advisory opinion that was posted to its website Sept. 27.
In the opinion letter, DOL said any benefits provided by the activities of the Hawaii Laborers' and Employers' Cooperation and Education Trust Fund (LECET fund) accrue generally to the construction industry in Hawaii rather than to participants or beneficiaries upon a specific occurrence.
The opinion was sought by Randal S. Yoshida, Yoshida & Associates, Honolulu. According to DOL, Yoshida represented that the LECET fund was jointly established by the General Contractors Labor Association and Building Industry Labor Association, with the Laborers International Union of North America, Local 368, AFL-CIO as of Dec. 1, 1993, pursuant to a trust agreement. The LECET fund is one of six funds in the Hawaii Laborers' Joint Trust Funds, and the trust agreement specifies six purposes for the fund.
The LECET fund was established and is operated as a labor management cooperation committee under Section 302(c)(9) of the Labor Management Relations Act of 1947. It is funded through contributions made by individual employers as specified in collective bargaining agreements and the trust agreement.
DOL said it clarified the definition of an “employee welfare benefit plan” in 29 C.F.R. §2510.3-1(a)(3) with regards to benefits described in LMRA Section 302(c). Under that regulation, it said, the effect of Section 3(1)(B) is to include within the definition of “welfare plan” these plans that provide holiday and severance benefits and other similar benefits.
Thus, based on the information and representations provided, it did not appear that the LECET fund provides any benefit included in ERISA Section 3(1)(A) or 3(1)(B), DOL said.