U.S. Labor Department settlement provides $5 million in restitution for Pennsylvania...

U.S. Labor Department settlement provides $5 million in restitution for
Pennsylvania builders health plan and reforms plan operations

PHILADELPHIA, Aug. 27 /PRNewswire-USNewswire/ -- The U.S. Department of
Labor has obtained a consent judgment in which the Pennsylvania Builders
Association (PBA), its wholly-owned subsidiary and its trustees agree 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 and/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 purposes. In
addition, current and future trustees must receive eight hours of fiduciary
training annually over the next five years.
"This $5 million judgment protects the benefits plan's participants by
restoring the funds and taking steps to make sure the plan is managed properly
in the future," said Secretary of Labor Elaine L. Chao.
The lawsuit being resolved alleged that PBA of Lemoyne, Pa.; its wholly-
owned subsidiary Builders Services Inc. (BSI); and trustees Robert Basile,
Patrick Brewer, Dennis Brislin, Scott Cannon, James Conner, Brad Elliott,
Charles Farrell, Chuck Hamilton, David Knipe, Gene Kreitzer, Gary Naeser,
Michael Rodino, Toni Rogan, Mack Smith, Chauncey Wirsing, Clarence Yeagley,
Jack Zimmer and Roger Zimmer violated their fiduciary duties to the
Pennsylvania Builders Association Benefits Trust. PBA sponsored the trust, and
BSI was administrator of the trust.
The suit alleges that PBA received royalty payments and BSI received
administrative fees under arrangements with BSI and the trust's third party
administrators. The royalties paid to PBA represented a percentage of the
administrative fees paid by contributing employers. The department alleged
that these royalty payments were prohibited because the sponsor had provided
its name and endorsement to the trust when it created and named the trust.
The trustees allegedly misused plan assets to pay royalties to PBA from 2000
to 2007, administrative fees to BSI from 2000 to 2007 and for political
lobbying from 2002 through 2004.
The trust provided health, life insurance, dental, vision and temporary
disability benefits to 12,616 participants as of 2006.
The court action, filed in the U.S. District Court for the Middle District
of Pennsylvania, resulted from an investigation conducted by the Washington
District Office of the Labor Department's Employee Benefits Security
Administration (EBSA). Employers and workers may contact the Washington
District Office of the EBSA at 202-693-8700 or toll-free at 866-444-3272 for
help with problems relating to private sector pension and health plans. In
fiscal year 2007, EBSA achieved monetary results of $1.5 billion related to
pension, 401(k), health and other benefits for millions of American workers
and their families.
Chao v. Pennsylvania Builders Association
Civil Action Number 1:08-cv-01564-SHR
U.S. Department of Labor releases are accessible on the Internet at
www.dol.gov. The information in this news release will be made available in
alternate format (large print, Braille, audio tape or disc) from the COAST
office upon request. Please specify which news release when placing your
request at 202-693-7828 or TTY 202-693-7755. The Labor Department is
committed to providing America's employers and employees with easy access to
understandable information on how to comply with its laws and regulations.
For more information, please visit www.dol.gov/compliance.
SOURCE U.S. Department of Labor

Gloria Della, +1-202-693-8664, or Richard Manning, +1-202-693- 4676, both of
the U.S. Department of Labor