Are Unpaid Contributions to a Multiemployer Plan Assets of the Plan?

Larry Beebe, CPA

If unpaid contributions are plan assets, the argument is that the company officials responsible for paying those contributions are plan fiduciaries. If they are plan fiduciaries can they be held personally liable for those contributions?

Recent court decisions have been split as to whether unpaid employer contributions are plan assets. A U.S. District Court for the Eastern District of Michigan recently ruled that unpaid employer contributions were not plan assets unless the agreement between the Fund and the employer, which is normally found in the Collective Bargaining Agreement (CBA), specifically and closely states that they are plan assets. *

The court also stated that under DOL regulations if the contributions are amounts withheld from an employee’s wages (i.e. employee contributions) then they are plan assets.

The case is: Trustees of Michigan Regional Counsel of Carpenters’ Employee Benefit Funds et al V. H.B. Stubbs Company et al, No. 2:14-CV-11393 (E.D. Mich. July 17, 2014)

*In the case in question the court ruled that since there was no such language in the CBA, the corporate officials were not plan fiduciaries and were not personally liable.

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