The U.S. Department of Labor has filed a lawsuit against the International Association of Machinists (IAM) National Pension Fund and its board of trustees, citing multiple violations of the Employee Retirement Income Security Act.
The lawsuit, which was filed at the end of January, alleges that the IAM National Pension Fund trustees breached their fiduciary duties by:
- Failing to loyally and prudently select fund service providers, including consultants and fund investment managers;
- Regularly ignoring required procedures included in the fund’s governing plan documents;
- Creating conflicts of interest for the fund;
- Unlawfully soliciting and accepting gratuities from plan service providers; and
- Spending and permitting others to spend fund assets lavishly on unnecessary trips, parties and extravagant food, wine, and accommodations.
Read: Responsible investment and fiduciary duty
According to the U.S. Department of Labor, the lawsuit is seeking a court order requiring the defendants to restore any losses suffered by the fund due to the alleged violations and requiring the fund to implement reforms to prevent future violations.
The IAM has raised questions about the allegations. In a statement, it said it “believes the DOL complaint should be withdrawn quickly to prevent further harm to the Fund’s reputation, and to prevent needless and costly litigation over issues previously addressed and properly resolved.
“The DOL complaint fails to note that all questionable expenditures were fully reimbursed and new policies put in place to ensure strict compliance with DOL rules.”