US Government Sues IAM Pension Fund Trustees Alleging Multiple Legal Violations and Misuse of Fund Assets

On January 24, 2016, the United States Department of Labor (DOL) filed a lawsuit against nine current or former trustees of the IAM National Pension Fund and the Fund. The lawsuit alleges many violations of the federal law that provides protections for employees in pension plans.

The nine individual defendants include current and former senior officers of the IAM, including former General Secretary-Treasurer Robert L. Roach and current International President Robert G. Martinez.  As trustees of the IAM’s pension plan, these individuals had strict legal obligations – called fiduciary duties – to act in the best interests of the plan and its participant IAM members. The lawsuit alleges serious and repeated violations of these responsibilities, all at the expense of the pension plan and the IAM members’ retirement security that the defendants were entrusted to protect.

The many allegations include:

  • Lavish and unnecessary spending on trips, parties and extravagant food, wine and accommodations. In particular, the trustees “utterly failed” to monitor and control expenses. Examples include:
    • over $1,000 bottles of wine; a nearly $2,000 dinner for two trustees; and over $90,000 for two holiday parties.
    • meetings at resort destinations and expensive hotels during peak times, including Hawaii, Beverly Hills and Martha’s Vineyard.
  • Failing to loyally and prudently select Fund service providers, including “sham” searches for consultants and investment managers that resulted in the selection of a non-competitive candidate with the highest fee (at $900,000 per year), whose father happened to have a personal relationship with then-IAM President R. Thomas Buffenbarger.
  • Disregarding the pension plan’s own policies by failing to conduct neutral and competitive screening and bidding of investment managers.
  • Conflicts of interest resulting in additional expenses of $470,000 per year for the plan.
  • Unlawfully soliciting and accepting gratuities from plan service providers, including dinners and parties at Board of Trustees meetings in places like Honolulu and the Bellagio in Las Vegas.


The DOL said: “This case clearly shows how the fund and its trustees shirked fiduciary responsibilities to the detriment of pension fund participants. The [DOL] will not tolerate when fiduciaries fall short of their legal obligations, and will take every necessary action to hold them accountable.”

In addition to other relief, the lawsuit seeks monetary damages to restore any losses the Fund suffered, as well as the return of any financial benefit or compensation realized as a result of the alleged violations.

According to the IAM, its National Pension Fund is the 5th largest multiemployer pension fund in the U.S., with more than 100,000 active participants.

IAM DOL Lawsuit Press Release 2.5.16



Learn More

%d bloggers like this: