Olms interpretative Manual

WHOMUSTBEBONDED:“DUTIES”

531.202SEE 29 CFR453.10, 453.11

WHO MUST BE BONDED:“LABORORGANIZATION”

531.302SEE 29 CFR453.3, 453.5

531.305$5,000EXEMPTION-DETERMINATION OFAMOUNT

See29CFR453.3.

WHOMUSTBE BONDED:

“TRUSTINWHICHALABORORGANIZATIONISINTERESTED”

531.402SEE 29 CFR453.4, 453.6

531.403 ERISABONDINGEXEMPTION

SPECIAL NOTE:Trusts bonded under ERISA need not be bonded under the LMRDA.See ManualEntry 530.005.

531.405TYPES OFTRUSTS COVERED

Thedefinitionin section3(1)of theActof“trustin whicha labororganizationis

interested”coverspensionfunds,healthandwelfarefunds,profitsharingfunds,vacationfunds,apprenticeship and training funds, and funds or trusts of a similar nature which exist for thepurposeof, orhave asaprimary purpose, theproviding ofbenefits specified inthe definition.
This is so regardless of whether they are administered solely by labor organizations or jointly bylabororganizationsandemployers,or byacorporate trustee,unless theywere neithercreatednorestablished by a labor organization and also do not have any trustee or member of the governingbodywho was selected or appointedby a labor organization.

29CFR 453.4

See Manual Entry 530.005.(Revised:Dec.2016)

531.406APPLICATIONTO TRUSTS

Theexemptionfromthebondingrequirementsforlabororganizationswhosepropertyandannual financial receipts do not exceed $5,000 in value, does not apply to trusts in which a labororganizationis interested.

See ManualEntry 530.005.

531.410EMPLOYEES OFTRUST

Allindividualsemployed byatrust inwhicha labororganizationis interestedare

“employees”regardlessofwhether, technically,theyare employedbythetrust, bythetrustee, bythetrust administrator,or bytrust officials in similar positions.
29CFR 453.6 (c).

531.412 OFFICERS AND EMPLOYEES OF TRUSTSee 29 CFR 453.6.
531.415PERSONNELOFEMPLOYERSWHO MUSTBEBONDED

Personnel,includingtrustees,regardlessofwhether theyarerepresentatives oforselectedby labor organizations, or representatives of or selected by employers, must be bonded if theyhandlefunds or other property of thetrust within the meaning ofsection 502(a).

See ManualEntry 530.005.

531.417CONTROLBYCORPORATECO-TRUSTEE

Wheretheindividual trusteesof atrust inwhichalabor organizationisinterested havethepower to direct the corporate co-trustee to liquidate securities on deposit with it at any time andpay over the proceeds thereof to the individual trustees, the individual trustees must be bondedpursuant to section 502 notwithstanding custody of the securities is retained throughout the yearby thecorporateco-trustee.

SeeManualEntry 530.005.

531.420JOINTLYADMINISTEREDFUND

Ifsome membersofaboard oftrusteesare appointedbythe union,thefund willbea“trustin which a union is interested,” and the trustees and key administrative personnel must be bondedif they handle funds or other property of the trust within the meaning of section 502(a), regardlessof whether they are representatives of or selected by employers.However, banks and otherqualified financial institutions in which trust funds are deposited are not subject to the bondingrequirements, even though they may also have administrative or management responsibilities withregardtosuch trusts.

See ManualEntry 530.005.

531.423JOINTAPPRENTICESHIP FUND

When a joint apprenticeship committee has one or more members of the governing bodyappointed by a labor organization and a primary purpose of any trust or funds overseen by thatcommitteeisto providebenefitstothemembersof thelabororganization, ortheirbeneficiaries,itfalls within the definition of a “trust in which a labor organization is interested” as defined insection 3(1)ofthe LMRDA.

See Manual Entry 530.005.(Revised:Dec.2016)

531.425JOINTLABOR-MANAGEMENTARBITRATIONCOMMITTEE

A neutral joint labor-management committee established and administered solely for thepurpose of serving both labor and management as an administrator or arbitrator under theprovisionsofacollective bargainingagreementwhich itinterpretsattherequestof eitherisnot atrustin which a labor organization is interested.

531.430EMPLOYERPLAN

If a plan is created, established and administered solely by the employer and if itsgoverningbodycontainsnomember selectedorappointedbyalabor organizationit wouldnot bea“trustin whicha labororganization isinterested” withinthe purviewofsection 502(a).

531.435EMPLOYERPENSION ORPROFIT-SHARING PLAN

A pension or profit-sharing plan which is established solely by an employer andadministered solely by him and his representatives does not meet the definitional requirements ofa “trust in which a labor organization is interested,” set forth in section 3(1) of the Act; and eventhough the primary purpose requirement under (2) of section 3(1) is satisfied, the bondingprovisions of the Act do not apply.This is so, notwithstanding the fact that the trust was createdasa consequence of a collective bargaining agreement.

(TechnicalRevisions:Dec. 2016)

531.460STRIKE FUND

A strike fund maintained by a group of unions as separate fund, and administered byrepresentatives of the several unions, will ordinarily constitute a “trust in which a labororganizationisinterested”andthusthe bondingrequirementof theActwillapplyinthose cases.

See Manual Entry 530.005.531.461

When a strike fund has been set up by several local labor organizations and the solepurpose of the fund is to solicit and receive money from labor organizations, the general public,and any other possible source, and expend it for the benefit of striking employees, such a fund is a“trustinwhicha labororganizationisinterested”and,consequently,thebondingprovisionsof theAct apply.