Mr. LIPPE. Mr. Pickle, I am in no position to comment on the motives of the pension fund trustees

Mr. PICKLE. I didn't ask you about the motive. I asked you if you knew the property was going to be foreclosed?

Mr. LIPPE. By the terms of the loan, Mr. Pickle, it was due shortly before the action that you have been describing, and the loan, at the time the fund took the action that you have been discussing, was in default.

Mr. PICKLE. What is
your name, sir?
Mr. KEIGHTLEY. Jim Keightley.

Mr. PICKLE. Did you know that the property was going to be foreclosed?

Mr. KEIGHTLEY. I have no personal knowledge of the case whatsoever, Congressman Pickle. Let me see if we have someone who does have such knowledge.

Mr. PICKLE. Mr. Miriani, do you know, then?

Mr. MIRIANI. Yes; we were aware of the condition of that loan and other loans. But I think it is necessary that you understand that we did not address the condition of this loan because the GSA was the lessee.

To us, it was just another loan.

Mr. PICKLE. What I am trying to establish is that neither you in IRS or the Labor Department had any participation in that foreclosure, no knowledge about it, that you were not party to any negotiation about it, and that you stood apart, both of you, and let that property be foreclosed; is that correct?

Mr. KELLY. That is correct.

Mr. MIRIANI. That is correct.

Mr. PICKLE. All right. That is a matter of record, then.
Thank you, Mr. Chairman.

Mr. GIBBONS. All right, Mr. Secretary, I have just a couple of other

matters.

One, I wish you all would give consideration when you make to Congress about how we can strengthen this law as to what could be done to expedite court cases so that the Government wouldn't be in a position of having to bargain with people.

I think that is not a very dignified position for the Government to be in. We ought to be a government of laws, and not a government of bargainers and of men, and I would hope that the Labor Department, which has a primary responsibility in this, would give some consideration as to what could be done to move matters of such grave concern as this into court expeditiously and to get expeditious court decisions.

I realize that is a touchy challenge, but I think that is one of the things that needs to be done.

Now, Mr. Secretary, I want to ask questions about the contracts between the Central States trustees and the money managers.

Does you department consider these to be public documents, or private documents?

Mr. KELLY. These are essentially private documents to which the Government is not a party. They are documents between the trustees and between the different investment managers.

Mr. GIBBONS. My question really goes as to whether or not these are documents that-I know if these had anything to do with the IRS, they couldn't make it public for fear of severe penalty that we have already placed upon ourselves, but are these documents subject to any kind of penalty as far as disclosure is concerned, as far as-well, I am talking about the documents, the contract between Equitable and the trustees and the other fiduciaries in the matter.

I don't know whether these are public documents or private documents, whether they could be made public or not, and who could make them public, and I am seeking guidance from you as to what ought to be done.

Mr. KLEVAN. It is my understanding, and I use the term, "my understanding," properly, because I was not directly privy to this, but it is my understanding that the documents were made available by the parties for the information and convenience of the committees involved, but that they would not be available for public distribution.

I may be incorrect in this, but this is what I was informed.

Mr. GIBBONS. The reason I asked this question is that I know we are going to get a lot of inquiries about these documents and what is in them, and I would hope that perhaps we can get some kind of written opinion from you on the matter rather than us shooting from the hip here.

Secretary MARSHALL. We will look into that.

Mr. GIBBONS. Fine. I would like to make them public. I have hardly examined them myself. I think it would be a matter, since the contracts have already been executed, and are binding upon the parties, I assume, and since this is at least semipublic matter, I would hope that your decision would be that these are available for public perusal, but I would prefer to have your opinion on that before I have to make a decision myself.

Now, the second thing that I have to ask about is something that really comes up under tomorrow's consideration, but we have you here, Mr. Secretary, and I want to ask you this question.

Is there a need or a requirement that the boards of trustees that we have, not only in this pension fund, but all other pension funds, have at least one-third of independent professional neutrals?

Should the term of service of these people be fixed, or should they be limited, or should they be more thoroughly defined than they are now?

In other words, we keep getting suggestions from outside people, particularly in collectively bargained plans that there is not enough neutrality in these plans, and is there in your opinion a need for at least a third of independent professional neutrals in this area?

Secretary MARSHALL. I can see where an independent neutral would be useful in some cases. I haven't really thought through the implications of requiring it by law. I would like to take time to explore the implications of that and give you a written comment on it.

Mr. GIBBONS. I wish you would, because it is a question often presented to the committee here, that here we have representatives of the union and representatives of management, and that really it involves a great deal of almost conflict of interest in decision that they have to make.

They are search parties to the decision. Management wants to keep peace with labor, and labor wants to get all that they can out of the process, and yet there is some conflict, and some commentators have suggested that maybe one way out of this basic dilemma, which is just fundamental to anything like this, is to bring in some so-called independent professionals.

I cannot figure out how you would identify an independent professional, or how you would appoint them, but that is a problem we get constantly thrown at us.

I would like you to give it some consideration.
Secretary MARSHALL. We will do that.

Mr. GIBBONS. Unless there are other questions, I want to thank you personally, Mr. Secretary and your staff, and people from the IRS, Mr. Lurie, and all of the rest of you for your attendance and for your helpfulness, and we look forward to seeing you in the future.

Secretary MARSHALL. Thank you, very much.

[Whereupon, at 11:45 a.m., the subcommittee adjourned, to reconyene at 8:30 a.m., July 20, 1977.]

TEAMSTERS' CENTRAL STATES PENSION FUND AND

GENERAL ERISA ENFORCEMENT

WEDNESDAY, JULY 20, 1977

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON OVERSIGHT,
COMMITTEE ON WAYS AND MEANS,

Washington, D.C.

The subcommittee met at 8:35 a.m., pursuant to notice, in the committee hearing room, Longworth House Office Building, Hon. Sam Gibbons (chairman of the subcommittee) presiding.

Mr. GIBBONS. Good morning. It is a pleasure to have you here. This morning, the subcommittee would like to concentrate on a series of general questions about current ERISA enforcement policies and the administration of these policies by the responsible agencies, IRS and the Department of Labor.

Some of these general questions arise out of the course of events that we have witnessed in the Teamsters Central States investigation. Though it has been turning heads prematurely gray through its short years of existence, and it may seem like a deterrent to many, the original ERISA plan and its amendments are just now being spelled out.

Tremendous efforts have gone into having the public learn to cope with ERISA.

Now, a second hard look at the statute and Government responsibilities is getting underway.

This committee has two broad concerns at this time, at the risk of oversimplification. First is that all plan sponsors, small and large, receive the goods with respect to voluntary ERISA compliance, and, second, that the responsible agencies have an effective enforcement plan to protect employee benefit rights.

While I expect later hearings will focus on the first of these concerns, today's hearings will focus on the second, enforcement policies under ERISA.

We are happy today to have with us, first of all, a group of Mr. Burkhardt, who was with us for a time yesterday, and Mr. Lanoff, who is administrator of the pension program. Mr. Burkhardt is Assistant Secretary of Labor for Labor-Management Service Administration, and I know, Mr. Burkhardt, that you have other people with you, some of whom I recognized, and I wonder if for the record you would introduce them.

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PANEL CONSISTING OF FRANCIS X. BURKHARDT, ASSISTANT SECRETARY OF LABOR FOR LABOR-MANAGEMENT RELATIONS; JACK BALLARD, DEPUTY ADMINISTRATOR, PENSION AND WELFARE BENEFIT PROGRAMS; IAN LANOFF, ADMINISTRATOR, PENSION AND WELFARE BENEFIT PROGRAMS; MONICA GALLAGHER, PLAN BENEFITS SECURITY DIVISION; AND MORTON KLEVAN, ACTING ASSOCIATE SOLICITOR, PLAN BENEFITS SECURITY DIVISION

Mr. BURKHARDT. Certainly, Mr. Chairman. I am Frank Burkhardt. On my right is Morton Klevan, who was with us yesterday. Next to him is Jack Ballard, Deputy Administrator, Pension and Welfare Benefit Programs. On my left is Ian Lanoff, Administrator, Pension and Welfare Benefit Programs, and next to him is Monica Gallagher, Counsel for Enforcement, Plan Benefits Security Division. She was also with us yesterday.

Mr. Chairman, I would like to begin this morning with just one side note, and this is in an effort to respond as quickly as possible to one of the questions that you raised yesterday.

Yesterday, you asked if there were any objection if you made the contracts between the Central States Teamsters Pension Fund and the various fiduciary managers public. We told you then that we desired to check with the parties to the contract before we gave you a formal answer since it was they who originally authorized the provisions of the contracts.

We are pleased to inform you that we have contacted representatives of the fund, Equitable, and Victor Palmieri Co., and they have no objection to release all of the agreements between the fund, Equitable and Palmieri.

We are in the process of contacting representatives of the three other investment managers for securities and other aspects and expect their reactions will be as positive.

Mr. GIBBONS. Thank you.

Mr. BURKHARDT. Mr. Chairman and members of the subcommittee, I am pleased to be here today to discuss the Employee Retirement Income Security Act-ERISA. I want to assure you of the commitment of the Department of Labor to implementing and administering ERISA effectively. I would also like to assure you of the complete cooperation of myself and my staff.

We are attempting to meet the needs of both the employer and employee as quickly as we can, while protecting the benefits of the participants. We have issued several sets of regulations since January, and have increased our efforts to quickly rule on exemptions.

I would like to discuss some of these regulations and exemptions at this time. It is important, I think, to draw the relationship in order to understand the improved situation our enforcement policies now face as a result of these changes.

On May 27, 1977, the Department issued final claims procedure regulations specifying procedures for filing employee benefit claims. The regulations require employee benefit plans to establish and maintain