In West Virginia Laborers’ Pension Trust Fund v. Owens Pipeline Service, LLC, Case No. 2:10-cv-00131 (S.D. West Virginia 2011), the Court faced the question of whether employer contributions (the “Contributions”) and certain deductions from employees’ wages (the “Deductions”), which were not yet paid (i.e., contributed) to the employee benefit plans at issue (the “Plans”), are “plan assets” of the Plans for purposes of ERISA.
As to the Deductions, the Court referred to Department of Labor regulations, found at 29 C.F.R. § 2510.3-102. Those regulations provide that unpaid deductions from employees’ wages to be used as plan contributions-other than union dues- become plan assets as of the earliest date on which the deducted amounts can reasonably be segregated from the employer’s general assets. However, in this case, the Deductions consisted entirely of union dues, which are expressly excluded from plan assets under the regulation. Accordingly, the Court concluded that the Deductions are not plan assets of the Plans.
As to the Contributions, the Court said that such contributions are not plan assets, unless the agreement between the plan and the employer specifically and clearly declares otherwise. Here, the governing agreements said that contributions due and owing to the Plans are considered and deemed to be trust funds. This “due and owing” language means that once a contribution is “due” to the Plans, based here upon the number of hours worked by union employees, the employer “owed” the money and the money was a plan asset. Thus, the Court concluded that the Contributions are plan assets of the Plans.