Member Action Wins Greater Accountability From Central PA Fund

October 18, 2006: For years the Central Pennsylvania Teamsters Fund was plagued with questionable administration and benefits inferior to many other Teamster Funds.

Fed up with this state of affairs, members formed the Central PA Reform Committee.

In 2002, three members filed a lawsuit against the fund. Initially they did the legal work on their own, but then attracted experienced pension attorney Ann Curry Thompson, who enlisted Alan Sandals, another experienced pension litigator, to serve as co-counsel with her to help the plaintiffs carry the case forward.

The suit cited breaches in fiduciary duty on the part of fund trustees and managers. Although fiduciary breach suits are difficult, the committee and their legal counsel poured through thousands of documents in order to build a strong case.

In 2005, the fund and its insurance carrier agreed to enter into settlement talks. In March 2006, both sides reached agreement on measures that will bring greater oversight and accountability to the fund. Additionally, a monetary settlement was reached for $1.75 million

Approximately $280,000 of the settlement was reserved to fund a comprehensive review of fund operations and investment management over the next four years by an outside consultant, Independent Fiduciary Services. The balance after fees and costs was restored directly to the Central PA Fund.

The agreement includes accountability measures that Teamsters in other funds have long argued for.

The comprehensive independent studies that will review all aspects of the fund’s performance will be made available to plan participants, as will any responses from the trustees.

The fund will also have to make detailed information publice that funds normally hide from participants, including:

  • The annual actuarial valuations for the plan and any amendments or revisions.
  • Actuarial reports relating to plan amendments.
  • Quarterly reports on the fund’s investment performance from 2006 and into the future.
  • Summaries of formal actions taken by trustees.

“Before, fund decisions and their impact were kept hidden,” said Drake Saxton, one of the plaintiffs. “This giant spotlight shining on the fund will provide the pressure needed to maintain policies that will protect and improve member benefits.”

Teamsters in other areas would like to see the same level of transparency from their funds. So far, Hoffa and fund trustees have opposed greater accountability.

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