Archived News Release — Caution: Information may be out of date.
U.S. DEPARTMENT OF
LABOR
BOSTON BROKER, LABOR DEPARTMENT REACH AGREEMENT
ON EXCESSIVE COMMISSIONS
Tues., Oct. 17,
1995
For more information call: (202) 219-8921.
The U.S. Department of Labor has reached a settlement with James D'Angelo, a broker with PaineWebber, Inc., and the company in which D'Angelo and PaineWebber agreed to pay the Benevolent Telephone Death Benefit Fund $450,000.
The settlement resolves the department's claims that D'Angelo charged excessive commissions to the fund, a Weymouth, Mass. employee benefit plan providing a $1,250 death benefit to union employees of the New England Telephone Company.
The Employee Retirement Income Security Act, which governs private pension and other benefit plans such as the fund, prohibits plan officials from paying more than reasonable compensation to service providers such as D'Angelo and PaineWebber. If more than reasonable compensation is paid, ERISA requires the service provider to repay the excessive amount. Whether compensation is reasonable generally depends on the particular facts and circumstances of each situation.
Under the settlement agreement, D'Angelo and PaineWebber have agreed to charge the fund for future brokerage services at a rate no greater than ordinarily would be paid for similar services to similar enterprises.
D'Angelo and PaineWebber did not admit or deny any allegations of possible violations of ERISA.
The fund was part of a benefits package sponsored by the International Brotherhood of Telephone Workers, which was replaced in 1969 by the International Brotherhood of Electrical Workers (IBEW). The IBEW did not continue the fund. It was incorporated and has functioned ever since as a separate benefit plan funded through participant contributions of $9 per year. The fund had 5,625 participants and $7 million in assets. It pays benefits on approximately 170 deaths per year.
D'Angelo has been the fund's sole securities broker for more than 20 years.
The settlement agreement is the result of an investigation by the department's Boston regional office of the Pension and Welfare Benefits Administration. The agreement was signed on Oct. 13.
Archived News Release — Caution: Information may be out of date.
