A federal court in Cleveland ordered trustees of Teamsters Local 293 pension and welfare plans, Cleveland, to repay $78,000 to the plans and hire The Segal Co. as an outside consultant to review the plans operations. The ruling is in response to a lawsuit filed by the Labor Department on Feb. 21 that claims the trustees violated their fiduciary duties under federal pension law. Under the court order, trustees also must institute joint chairmanship by a union and non-union trustee to approve all actions of the trustees and sign all plan documents.
The pension plan had assets of $49.8 million at the end of 1998, the last date for which information is available. The Labor Departments suit alleges the trustees paid excessive administrative fees to Teamsters Local 293 plan officials to manage the plans, and that the trustees failed to monitor these fees paid. According to the lawsuit, trustees paid administration fees of $19 per participant per month to Local 293 for each of the plans. That amounts to $333,564 for the pension plan, or 0.7% of its total assets. The fees paid by the welfare plan subsequently were raised to $23 per participant in March 1997.