Federal Court Orders Changes In Management Of Ohio Teamsters Plans

Archived News Release — Caution: Information may be out of date.

A federal court in Cleveland, Ohio has ordered the trustees of the pension and welfare plans of Teamsters Union Local 293 to repay $78,000 to the plans and to hire the Segal Company as an independent consultant to assess the plans’ operations, according to a consent order and judgment obtained on March 8, 2001 by the U.S. Department of

Under the judgment, the Segal Company will assess current operations carried on by the plans, including the reasonableness of staffing, compensation, duties and responsibilities and qualifications. In addition, the judgment requires that the trustees and their successors institute joint chairmanship – one union and one non-union trustee – to approve actions of the trustees and sign all plan documents.

Teamsters Local 293 sponsors the plans under a collective bargaining agreement with participating employers. As of December 31, 1998, the pension plan covered 1,463 participants and had assets of $49,840,569. The welfare plan provides health benefits to as many as 1,358 participants.

The lawsuit alleges that the trustees violated their duties under the Employee Retirement Income Security Act (ERISA) by paying excessive administrative fees to Local 293 for management of the plans. They also allegedly failed to investigate whether the amount was excessive or to monitor fees paid by the plans. Named as defendants are trustees James Petrucci, Charles Passe, Jack Sideris, John Gerard, Dominic Lemmo, August D. DiMario and Kenneth Ensman.

According to the lawsuit, the trustees paid $19 monthly per participant for each of the plans to Local 293 to cover plan administration. The monthly fee paid by the welfare fund was subsequently increased to $23 in March 1997.

The lawsuit and consent judgment, filed simultaneously on February 21, resulted from an investigation conducted by the Cincinnati Regional Office of the Pension and Welfare Benefits Administration into alleged violations of ERISA.

"Our goal is to assure that consumers know that the department is only a phone call away to help protect the benefits promised by employers," said Joseph Menez, director of PWBA’s Cincinnati Regional Office. "Employers and workers can reach us at 859.578.4680 for help with any problems relating to private- sector pension and health plans."

(Chao v. Petrucci
Civil Action No. 1:01CV0421)

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Archived News Release — Caution: Information may be out of date.