New Report: Union Pension Funds at Risk

The U.S. Dep’t of Labor believes funds in union-sponsored employee benefit plans are vulnerable to “corrupt plan officials, service providers, and organized crime elements,” according to DOL’s Office of Inspector Gen.’s semiannual report to Congress for Apr. 1 to Sept. 30, 2000. The OIG report said it was concerned about corrupt lawyers, accountants, and investment advisors who provide services to union pension plans. OIG currently is pursuing 28 cases involving service providers to pension plans with over $1.5 billion in total assets.

“The OIG remains concerned that with such large amounts of money and limited oversight, union-affiliated benefit plans remain vulnerable to fraud and corruption,” the report said.

The report also stated worries about health care fraud in DOL and union-related health plans, “resulting in millions of dollars in losses to the federal government and private insurance companies.” OIG said several examples illustrate “the damage that can be done” by health providers who evade state insurance regulation by claiming ERISA preemption as a multiple-employer welfare arrangement and creating a bogus labor union to do so. The OIG report will be available at <>. [BNA 12/7/00]