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Pennsylvania Builders Association provides restitution


September 2008 Scranton/Wilkes-Barre/Hazleton edition of The Union News

Pennsylvania Builders Association provides restitution


REGION, August 28th- The United States Department of Labor (DOL) has obtained a consent judgement in which the Pennsylvania Builders Association (PBA), its wholly owned subsidiary and its trustees agree to provide $5 million in restitution for the groups health plan and reforms plan operations.

According to the DOL, the PBA will restore $5 million to the fund and pay a civil penalty of $500,000. The judgement also permanently bars the trustees from using plan assets to pay royalties and/or licensing fees to the association, prevents the trustees from contracting with the subsidiary for administrative services in exchange for fees, and prohibits the use of trust assests for lobbying purposes. In addition, current and future trustees must receive eight hours of fiduciary training annually over the next five years.

The DOL alleged that the Pennsylvania Builders Association of Lemoyne, Pennsylvania, its wholly-owned subsidiary Builders Services Inc, and trustees Robert Basile, Patrick Brewer, Dennis Brislin, Scott Cannon, James Conner, Brad Elliott, Charles Farrell, Chuck Hamilton, David Knipe, Gene Kreitzer, Gary Naeser, Michael Rodino, Toni Rogan, Mack Smith, Chauncey Wirsing, Clarence Yeagley, Jack Zimmer and Roger Zimmer violated their fiduciary duties to the Pennsylvania Builders Association Benefits Trust. PBA sponsored the trust, and the Builders Services Inc. was administrator of the trust.

The suit alleges that PBA received royalty payments and BSI received administrative fees under arrangements with BSI and the trust’s third party administrators. The royalties paid to the PBA represented a percentage of the administrative fees paid by contributing employers. The DOL alleged that these royalty payments were prohibited because the sponsor had provided its name and endorsement to the trust when it created and named the trust. The trustees allegedly misused plan assets to pay royalties to PBA from 2000 to 2007, administrative fees to BSI from 2000 to 2007 and for political lobbying from 2002 through 2004.

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