Joint Collection Policy & Procedures





In order to clarify the rights and responsibilities of all contributing Employers, the Boards of Trustees of the International Union of Operating Engineers Local 132 Health and Welfare Fund, International Union of Operating Engineers Local 132 Pension Fund, International Union of Operating Engineers Local 132 Annuity and Savings Fund, and International Union of Operating Engineers Local 132 Apprenticeship and Skill Improvement Fund (the “Funds”) hereby adopt this Statement of Policy, which supersedes and replaces all prior collection and audit policies for the Funds. The Trustees acknowledge the requirements of Prohibited Transaction Exemption 76-1 regarding the determination of uncollectable funds, agreements for payment of less than the full amount owing, and agreements for payment of amounts owing over a period of time. The intent of the Trustees is to comply at all times with the mandates of the Employee Retirement and Income Security Act of 1974 (“ERISA”), as amended, and the Internal Revenue Code. This Statement of Policy shall be administered and interpreted with such intent.


  1. Employer reports of hours worked and accompanying contributions must be received by the Funds by the Due Date. The Due Date is the 15th day of the month following the month in which the work was performed. If the Due Date is not a regular business day, then contributions are due on the next regular business day.
  2. If a required report or contributions are not received on or before the Due Date, the contributions shall be deemed delinquent as of the Due Date.
  3. An Employer shall also be deemed delinquent if:
    1. Contributions are not made on behalf of all the employees for whom contributions are required by the applicable collective bargaining agreement; or,
    2. Contributions are not properly computed according to the required contribution formula specified in the applicable collective bargaining agreement; or,
    3. No monthly report of hours worked is submitted; or,
    4. The Employer fails to produce records requested by the Fund, fails to maintain adequate payroll records, or refuses to permit a payroll compliance audit.
  1. If an Employer is delinquent, the Trustees may infer the Employer’s contribution liability based upon reasonable assumptions. Such reasonable assumptions may include, but are not limited to, projections of monthly liabilities based upon the greater of the Employer’s average contributions over the last three or twelve months for which the Employer submitted monthly contribution reports.


  1. Liquidated damages equal to 10 percent of the contribution due will be assessed if payment in full is not received by the last day of the month in which the contributions were due.
  2. The assessment of liquidated damages may be deferred until the Funds have received a contribution report or other basis for determining with reasonable accuracy the amount of the employer contribution due. The Trustees may assess liquidated damages based upon an Employer contribution liability which has been inferred in accordance with paragraph 4 of this Policy.
  3. An Employer may appeal the assessment of liquidated damages to the Trustees. All appeals must be in writing and must state the reason(s) for such appeal. Except as stated in the following paragraph, appeals may be granted at the sole discretion of the Trustees and on a case-by-case basis. Such appeals will not act to delay any legal or equitable action deemed necessary by the Trustees.


  1. Any contribution which is delinquent will accrue simple interest at the rate of 1.5% percent per month, calculated from the Due Date through the date that payment of the delinquent contribution is received by the Funds.


  1. Within five days of the Due Date, or as administratively possible thereafter, the Funds will send a written notice to each delinquent Employer advising the Employer of the delinquency and requesting payment of the contributions and a copy of the Employer’s monthly contribution report. If payment of the delinquent contributions is not received within ten days of the Funds’ initial notice, the Funds will send a second written notice in a substantially similar form.
  2. If payment of the delinquent contributions is not received within ten days of the Funds’ second notice, the Funds may refer the matter to the Funds’ Counsel for appropriate action. If referral to legal counsel is required to collect delinquent contributions, the Employer may be assessed attorney fees and costs in addition to liquidated damages, interest, and any other applicable costs of collection.
  3. The Trustees may elect to bring legal action at any time and may exercise any legal avenue for recovery including, but not limited to: bond claims; liens; administrative actions; ERISA claims; and any other right granted under state or federal law. In the event legal action is necessary, the Employer will be solely responsible for unpaid contributions, liquidated damages, interest, attorney fees and costs, audit fees and costs, and such other legal or equitable relief as deemed appropriate.


  1. In order to verify the compliance of Employers, the Trustees will conduct a program of random payroll audits. It is the general intention of the Trustees that Employers be audited approximately every six years. The Trustees will consider the professional opinion of the Funds’ auditors, along with relevant AICPA guidelines, when determining the frequency of random audits.
  2. Employers may also be audited for cause where warranted. An audit initiated for cause may cover any period of time deemed appropriate and necessary by the Trustees.
  3. Employers will be notified in writing that an auditor has been authorized to conduct a payroll audit. Such notice will include the name of the auditor, the date for which the audit is scheduled, and the records to be produced. The auditor may make the initial contact on behalf of the Funds to schedule the audit. The Employer shall produce all records requested by the auditor in a timely manner and shall otherwise cooperate in enabling the auditor to complete the audit.
  4. If an Employer does not fully cooperate with the Funds’ Auditor, the Auditor or Administrator may refer the matter to the Funds’ Counsel for appropriate action to obtain the Employer’s compliance.
  5. At the conclusion of the audit, the Employer will be notified in writing of the Auditor’s findings. Copies of the audit results may also be provided to Fund Counsel.
  6. The cost of any audit will be paid by the Funds unless the audit discloses a deficiency greater than either $1,000 or 5% of the Employer’s total contributions owed for the audited period. Additionally, if referral to Fund Counsel is required to compel an audit, all costs, expenses, attorney’s fees, and other professional fees may assessed against the Employer.


  1. Consistent with Section 403(c) of ERISA, any Employer that has made an overpayment to the Funds as the result of a mistake of fact or law may submit a written request for a refund to the Funds’ Trustees. The Trustees may vote to refund any mistaken contributions made by the Employer in the 12 months immediately preceding the date the Employer provided written notice to the Funds. Should a request for refund be approved by the Trustees, the return of overpayment(s) will occur within the six months immediately following the date the Fund Administrator determines that an overpayment was made. No interest shall accrue on the amount of the overpayment.
  2. Any benefits paid, premiums paid, and/or administrative expenses required to calculate the amount to be refunded shall be deducted from the amount of erroneous contributions. No refund shall be made unless the Employer first executes a full release of all claims and an agreement to indemnify, defend, and hold harmless the Funds, the Trustees, fiduciaries and agents, from any and all claims relating to the alleged mistaken contributions.
  3. Nothing herein shall prohibit the Funds’ Administrator from making routine adjustments to correct errors in monthly remittance reports and provide credits and/or refunds to Employers.


  1. The Trustees may amend this Policy at any time.

While the intent of this procedure is to audit all employers making contributions to the Fund on a random basis, nothing contained herein will prohibit the Trustees from authorizing more regular audits of employers who are delinquent in their payments, who consistently submit erroneous reports, who exhibit difficulties in making payments or who otherwise are, in the Trustees’ opinion, appropriate candidates for audit.