Court Gives Sweeping Powers to Pension Fund Trustees
WASHINGTON (AP) _ The Supreme Court today gave sweeping powers to pension fund trustees to examine the records of companies contributing to multi-employer benefit plans.
In a 6-3 ruling, the court overturned a decision that sharply limited the power of Teamsters Union pension fund trustees to audit the books of 16 interstate trucking companies.
Justice Thurgood Marshall, in his opinion for the court, said the authority of the Teamsters fund trustees to conduct such audits is ″entirely reasonable in light of″ a 1974 law dealing with multi-employer pension plans, the Employee Retirement Income Security Act (ERISA.)
″The requested audit is highly relevant to legitimate trustee concerns,″ Marshall said.
Last year, the 6th U.S. Circuit Court of Appeals overturned a federal judge in Michigan who had ruled in favor of the Teamsters Central States, Southeast and Southwest Areas pension and health and welfare funds.
The appeals court said the trustees were entitled only to audit records covering four employees whose names were omitted from documents listing employees covered by collective bargaining agreements.
Although the names of the workers were not on the lists, their employers were supposed to be contributing on their behalf to the pension fund.
The trustees, in investigating the matter in 1980, examined records which they said showed the companies failed to pay more than $268,000 they owed to the funds.
Auditors for the trustees then sought further documents, including tax forms and complete payroll ledgers from the firms.
The appeals court limited the auditors to inspecting the records of workers they have ″reasonable cause″ to believe are covered by a union contract but whose names improperly were left off union rolls.
The Supreme Court today broadened the auditors’ power.
A benefit plan should not have to rely on the union to assure that employers are making full contributions to the fund, Marshall said.
He also rejected the argument that the Labor Department could guarantee the pension funds received all money they are owed.
The department lacks the resources to police the more than 11,000 multi- employer benefit funds nationwide, Marshall said. He noted that the Reagan administration itself said the pension funds, rather than the government, are empowered to conduct the audits.
In an opinion partly dissenting from the court’s ruling, Justice John Paul Stevens said the right of a fund to conduct such an audit must be authorized by a union contract. The Teamsters contracts did not empower the pension fund specifically to audit the books of employers, Stevens said.
He was joined by Chief Justice Warren E. Burger and Justice William H. Rehnquist.