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DOL Home > OALJ > ERISA > USDOL v. Board of Trustees of the Schenectady Local 105 Annuity Fund, 95-RIS-40 (ALJ Oct. 31, 1997)
USDOL/OALJ Reporter
USDOL v. Board of Trustees of the Schenectady Local 105 Annuity Fund, 95-RIS-40 (ALJ Oct. 31, 1997)
U.S. Department of Labor
Office of Administrative Law Judges
525 Vine Street - Suite 900
Cincinnati, Ohio 45202 412 644-5754 DATE ISSUED: October 31, 1997
CASE NO.: 95-RIS-40
In the Matter of
UNITED STATES DEPARTMENT OF LABOR, PENSION AND WELFARE BENEFITS ADMINISTRATION
Complainant
v.
BOARD OF TRUSTEES OF THE SCHENECTADY LOCAL 105 ANNUITY FUND
Respondent
Appearances:
Stevan Durovic, Esquire
For the Complainant
Kevin J. McCoy, CPA
For the Respondent
Before: RICHARD A..MORGAN
Administrative Law Judge
DECISION APPROVING SETTLEMENT AND DISMISSAL ORDER PROCEDURAL HISTORY The United States Department of Labor, Pension and Welfare Benefits Administration ("PWBA") brought a complaint against the Board of Trustees of the Schenectady Local 105 Annuity Fund (the "Board") regarding reporting deficiencies in connection with the Fund's 1992 Annual Report under the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001, et seq., and the Secretary's Order 1-87, 52 Fed. Reg. 13,139, as implemented by regulations found at 29 C.F.R. Parts 2560 and 2570.
[Page 2] On May 5, 1995, the PWBA waived 95% of the original penalty it had intended to assess against the Board of Trustees based upon the Board's explanations, but did not waive $2,500 of the penalty. On June 1, 1995, the Board filed an answer, under 29 C.F.R. § 2570.61(c), requesting a hearing before an administrative law judge. I was assigned the case on June 10, 1997 and scheduled a hearing for October 30, 1997. On October 29, 1997, the parties entered a settlement and agreed to a joint "Stipulation for Dismissal and Order," a copy of which is attached and incorporated herein.
TERMS OF JOINT STIPULATION The Stipulation for Dismissal and Order provides that the record shall consist of solely the Notice of Determination and the "Stipulation for Dismissal and Order." The parties agreed, among other matters, that payment by the Board, on October 29, 1997, of a penalty assessment in the amount of one thousand dollars (,000) resolved all penalties and claims the PWBA may have against the Board as plan administrator of the Schenectady Local 105 Annuity Fund 001 regarding reporting violations under ERISA in connection with the Fund's 1992 annual report.
In addition to complying with the provisions of 29 C.F.R. § 2570.65(b), the parties agreed to each bear their own costs, expenses, and legal and accounting fees incurred in connection with this action.
FINDINGS OF FACT AND LAW On May 5, 1995, the PWBA issued a "Notice of Determination on Statement of Reasonable Cause of the Schenectady Local 105 Annuity Fund Annual Report," related to its plan number 001 for the plan year ending December 31, 1992. On March 24, 1995, the Board had been previously notified of the Department of Labor's ("DOL") intent to assess a penalty for the Board's unsatisfactory Form 5500 annual report. The DOL alleged the annual report was deficient in that the Independent Qualified Public Accountant (IQPA) report contained the following unacceptable material qualifications, under Section 104(a)(4) ERISA:
1) The IQPA report contained a scope limitation other than that provided in 20 C.F.R. §§ 2520.103-8 or 2520.103-12.
2) The IQPA report indicated their audit did not include audit of employer payroll records to determine whether contributions had been properly reported and that they were able to satisfy themselves by other procedures concerning contribution amounts.
[Page 3] On April 15, 1995, the Board filed a statement of reasonable cause for failure to file a satisfactory complete annual report for 1992 in response to the DOL's Notice of Intent to Assess a Penalty which the DOL determined provided a basis to waive part of the penalty, $47,500 (95%), because the IPQA report and financial statements were made satisfactory. The DOL did not waive $2,500 of the penalty having found no reasonable cause for the Board's failure to attach an acceptable IQPA report to his original filing or his failure to "correct timely."
I find the Board filed an unsatisfactory Form 5500 annual report for 1992 which was deficient in the manner alleged by the PWBA. The DOL properly assessed a penalty, under the procedures set forth in 29 C.F.R. § 2560.502c-1, and properly waived a portion of the penalty after considering the Board's statement of reasonable cause.
The agreed upon payment of ,000, made October 29, 1997, is appropriate, taking into consideration the nature of the deficiency, the degree or willfulness of the matter, the time taken to correct the deficiencies and the parties' agreement to settle the matter.
ORDER WHEREFORE, it is ordered that the Complaint of the United States Department of Labor, Pension and Welfare Benefits Administration ("PWBA") against the Board of Trustees of the Schenectady Local 105 Annuity Fund (the "Fund") in the above-styled matter is dismissed with prejudice. This Order constitutes the final agency action within the meaning of 5 U.S.C. § 704.
RICHARD A. MORGAN
Administrative Law Judge
RAM:DMR
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