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News Release
Labor Department Sues Iowa Fiduciaries for Using Plan Money to Cover Employment Related Expenses
Archived News Release — Caution: Information may be out of date.
Kansas City, Missouri - The U.S. Department of Labor sued the fiduciaries of the Des Moines Plumbers and Steamfitters Local Union No. 33 Health and Welfare Fund on March 20, for improperly using more than $69,000 of the plan’s assets to finance employment-related drug screenings, physicals, and legal fees associated with a drug screening policy.
The Des Moines Plumbers and Steamfitters Local Union No. 33 Health and Welfare Fund, which was established on January 15, 1963, provides medical, surgical, disability and related benefits to an estimated 1000 current and retired participants and beneficiaries. Approximately 40 employers contribute to the plan.
The suit alleges that from March 1996 to September 2001, the fiduciaries caused the plan to incur expenses totaling $69,097.65 for pre-employment physicals and/or drug testing and legal fees related to the screening policy. Additionally, the department’s suit alleges the fiduciaries violated provisions of the Employee Retirement Income Security Act (ERISA) by failing to use plan assets for the exclusive benefit of the plan’s participants and beneficiaries and by failing to discharge their duties in a prudent manner.
The suit seeks to have the defendants restore all losses with interest to the plan for their fiduciary breaches and to reverse the prohibited transactions.
The suit, filed in the federal district court in Des Moines, Iowa, resulted from an investigation conducted by the Kansas City Regional Office of the department’s Pension and Welfare Benefits Administration into alleged violations of ERISA.
(Chao v. Allen et al
Civil Action No. 4:02-CV-10146)
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Archived News Release — Caution: Information may be out of date.