TO: Participating Employers
FROM: Office of the Administrative Manager
RE: Audit Program, Supplemental Billing Procedures, and USERRA Obligations
This is the third in a series of Bulletins issued to assist Employers in their monthly Pension reporting and in understanding other aspects of Trust administration.
The Trustees have directed the Administrative Offices to periodically examine the payroll records of employers participating in the Trust. Audits are commonly performed at four year intervals, however, if significant exceptions in reporting are identified, subsequent audits are performed at either one or two year intervals. Employers are contacted in writing by the Trust's audit staff to arrange an appropriate time and place for the audit to be conducted.
Common exceptions discovered in the audit process include: Failure to report newly hired employees from their first hour of employment; Failure to report non-regular employees such as casuals, seasonal or part-time employees; Contributing on more hours than for which compensation was paid; Contributing above the monthly maximum or yearly maximum as required by the labor agreement; Failure to include all compensable hours at termination.
The results of payroll examinations are communicated, in written form, to Employers. Interest is assessed on net shortages. Payment or resolution of audit billings is required within 30 days of notification. Net overpayments are applied to future monthly reports or may be refunded to the employer.
Another means of notifying Employers of exceptions in Pension reporting is via a supplemental billing or credit advice. When the administrative office becomes aware of a shortage or overpayment on one or more employees, a letter describing the problem is sent, giving 30 days for the Employer to respond. The most frequent causes of supplemental billings are retroactive Pension rate increases negotiated into a renewed labor agreement and failure to report all hours due on an employee (often new hires).
The goal of both the Payroll Audit Program and the Supplemental Billing procedures is to ensure that every participant in the Trust is credited each month with accurate hours and contributions. As each employee retires, he or she can be confident of receiving the full and correct Pension benefit to which he or she is entitled.
LEGAL UPDATE - Employer Obligations to Continue Pension Coverage for Employees in Military Service
The Uniformed Service Employment and Reemployment Right Act (USERRA) became law on December 12, 1994. Its purpose is to encourage non-career military service with a minimum of disruption of civilian careers. The new law clarifies the obligations of multiemployer pension trusts like the Western Conference of Teamsters Pension Trust to provide pension coverage to Plan participants for their periods of protected military service, and the obligations of contributing employers to make the pension contributions necessary to fund pension coverage.
Under USERRA, as a contributing employer to the Western Conference Trust you have several pension obligations regarding an employee who leaves covered employment to enter military service and thereafter returns to work for you while his USERRA reemployment rights are protected:
First, if your employee is absent from work for no more than 30 consecutive days because of military service, you are obligated under USERRA to continue making pension contributions to the Western Conference Trust just as if the employee had continued in covered employment without interruption.
Second, if your employee is absent from covered employment for more than 30 days because of military service and then returns to work for you while his USERRA reemployment rights are protected, you are obligated under USERRA to do two things:
(A) You must notify the Trust in writing within 30 days after your employee's return to work.
(B) You must pay retroactive pension contributions to the Trust on the employee’s behalf for the period he or she was absent from covered employment just as if the employee had never left covered employment with your company.
Under USERRA, you are not obligated to pay interest on these retroactive pension contributions. However, if you fail to pay required USERRA pension contributions to the Trust on a timely basis, those contributions will be considered delinquent and processed under the Trust’s regular delinquency procedures just like any other overdue pension contributions, thereby exposing you to liability for interest on those contributions from their due date, plus liquidated damages and attorneys fees. Employer compliance with USERRA's pension contribution obligations will also be monitored as part of the Trust’s regular employer audit program.
Because USERRA is relatively new, the Trust is ready to work with you in resolving any questions that may arise about your pension obligations under USERRA for employees who are covered by the Western Conference of Teamsters Pension Plan. When specific questions arise, please contact the Pension Accounting Supervisor at the Administrative Office of the Trust.
If you have any questions about any other obligations you may have under USERRA to your employees or to other fringe benefit plans, we urge you to consult with your own legal advisors or the administrators of those other plans. Please retain this bulletin for future reference.