Notice of Proposal to Rescind the Form T-1
"On February 2, 2010, the Office of Labor-Management Standards (OLMS) published in the Federal Register a notice proposing to rescind the Form T-1, Trust Annual Report. As part of its proposal to rescind the Form T-1, OLMS proposes to return to the Form LM-2 Labor Organization Annual Report the reporting of entities that are wholly owned, controlled, and financed by a single union (i.e. “subsidiary organizations”). Additionally, in interpreting the definition of “labor organization” under the Labor-Management Reporting and Disclosure Act (LMRDA), OLMS in its notice proposes to return to its long held view that the statute’s coverage does not encompass intermediate bodies that are wholly composed of public sector labor organizations. In so doing, OLMS has reconsidered a definitional interpretation that it adopted in 2003, and now considers that its pre-2003 policy constitutes a better effectuation of the purposes of the statute.
Comments on the notice to rescind the Form T-1, return subsidiary organization reporting to the Form LM-2, and revise its interpretation regarding LMRDA coverage of intermediate labor organizations, must be received on or before April 5, 2010.
Due Date: on December 30, 2009, OLMS published in the Federal Register a rule extending for one year the filing due date of all Form T-1 reports required to be filed during calendar year 2010. The rule does not affect those reports due during calendar year 2011 or beyond. This extension will prevent unions from incurring costly reporting burdens pending the rulemaking to rescind the Form T-1 regulation."
Office of Labor Management Standards, U.S. Department of Labor
Form T-1 Information
The U.S. Department of Labor published the final rule for Form T-1 on September 30, 2008. This final rule requires that a labor organization with total annual receipts of $250,000 or more file a Form T- 1 for each trust of the type defined by section 3(l) of the Labor-Management Reporting and Disclosure Act (LMRDA) and that meets one of two filing triggers: The labor organization, alone or with other labor organizations, either:
- appoints or selects a majority of the members of the trust’s governing board; or
- makes contributions to the trust that exceed 50 percent of the trust’s receipts during the trust’s fiscal year. (All contributions made pursuant to a collective bargaining agreement shall be considered contributions by the labor organization)
The final rule provides five exemptions to the Form T-1 filing requirements:
- a political action committee (PAC) fund, if publicly available reports on the PAC fund are filed in a timely manner with federal or state agencies;
- any political organization for which reports are filed with the IRS under section 527 of the IRS code;
- trusts required to file a Form 5500 under the Employee Retirement Income Security Act (ERISA);
- federal employee health benefit plans that are subject to the provisions of the Federal Employees Health Benefits Act (FEHBA); and
- any trust for which an independent audit has been conducted, in accordance with the standards set forth in this final rule.
Employee benefit plans that are exempt from filing Form 5500, including training and apprenticeship plans that have opted not to file Form 5500, must file the new Form T-1.
The Form T-1 includes the reporting of aggregate assets, liabilities, receipts and disbursements as well as other information about the organization. Additionally, the report must include the names of the parties with which the trust engaged in $10,000 or more of commerce, either via individual or aggregated transactions and their address, the nature of the business and the transaction date and purpose.
The report is due within 90 days following the labor organization’s year-end and is filed along with the Form LM-2. The report must be signed by the labor organization President and Treasurer. It is based on the fiscal year of the trust, not the labor organization. Trust fund fiduciaries are permitted to provide the information required by Form T-1 to the labor organization as long as the reasonable costs incurred to produce the information and/or the report itself is reimbursed by the labor organization.
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