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Secretary's Order 9-77

U.S. DEPARTMENT OF LABOR,

OFFICE OF THE SECRETARY, Washington, D.C., September 14, 1977.

Subject: Delegation of authority and assignment of responsibilities for labormanagement relations programs.

1. Purpose. To delegate authority and assign responsibility to the Assistant Secretary for Labor-Management Relations.

2. Background.-In an effort to improve the operational effectiveness of the Employee Retirement Income Security Act (ERISA) a decision was made in 1976 to delegate policy and program management authority for ERISA directly from the Secretary to the Administrator of Pension and Welfare Benefit Programs instead of through the Assistant Secretary for Labor-Management Relations.

However, because of the close relationship of the ERISA program to other programs administered by the Assistant Secretary for Labor-Management Relations the public would be better served were all labor-management relations programs under the leadership and supervision of the Assistant Secretary. Therefore, the arrangement effected in 1976 is terminated by this Order.

3. Delegation of authority and assignment of responsibilities.—a. The Assistant Secretary for Labor-Management Relations is delegated authority-including authority to redelegate and assigned responsibilities, except as hereinafter provided, for carrying out labor-management relations programs and activities to be performed by the Secretary of Labor under:

(1) The Organic Act establishing the Department of Labor, March 4, 1913, as amended (37 Stat., 736; 29 U.S.C. 551);

(2) Labor-Management Reporting and Disclosure Act of 1959, as amended; (3) Employee Retirement Income Security Act of 1974, except for Subtitle C of Title III and Title IV;

(4) Welfare and Pension Plans Disclosure Act of 1958, as amended;

(5) Sections 3(e), 4 and 13 (c) of the Urban Mass Transportation Act of 1964 (Public Law 88-365, amended);

(6) Section 6(a) of the Act of 1965 Authorizing Research and Development in High Speed Ground Transportation (Public Law 89-220);

(7) Section 405 (a), 405(b), 405 (c) and 405 (e) of the Rail Passenger Service Act of 1970 (Public Law 91-518);

(8) The Veterans' Reemployment Rights provisions of the Vietnam Era Readjustment Assistance Act of 1974 and their predecessor statutes.

b. The Solicitor of Labor shall have the responsibility for providing legal advice and assistance to:

(1) All officers of the Department relating to the administration of the statutes listed in paragraph 3a above and for bringing appropriate legal actions on behalf of, and representing the Secretary in all civil proceedings; and,

(2) The Assistant Secretary for Labor-Management Relations relating to the administration of Executive Order 11491 governing labor-management relations

in the Federal service.

4. Reservation of authority.-The submission of reports and recommendations to the President and the Congress concerning the administration of the statutes listed in paragraph 3a above and responsibilities under Subtitle C of Title III of the Employee Retirement Income Security Act is reserved to the Secretary. 5. Directives affected.-Secretary's Orders 11-72 and 13-76 are canceled by this Order.

RAY MARSHALL,
Secretary of Labor.

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Mr. PICKLE. Let me shift a little on you to go to a problem that might need correction.

My question would be, should all pension plans sponsored by a single union be required to enter into reciprocity agreements so as to provide reciprocal benefits to members of that union who are covered at different times in their carrers by different plans sponsored by the same union?

For example, there are some 270 separate Teamster pension and welfare plans. Some of these teamsters, though, have switched locals, still within their organization, but a local that is not covered in the same way they have been, and they have lost their vested rights.

Let's take an example. In many instances, a teamster from Texas, if he went to Alaska would in effect lose his rights because they are not covered in Alaska. Isn't that a gap of vested rights for teamsters in that particular area?

Sould something be done about that?

Mr. BURKHARDT. Mr. Congressman, that particular problem I am well aware of. I happen to come out of an industry that had that problem. The construction industry has that problem all over.

They have many different local union plans, and when an individual moves his work because of seasonality, they do have this problem. A number of unions have attempted to rectify this by negotiating national pensions plans.

In my particular union, we had one. What we attempted to do was that the individual was vested no matter where he worked as long as the employers were signed to a contract, and we managed in that particular union to accommodate approximately 50 percent of the people.

Now, in answer to your question, it is a gap. I am not sure it is one that is best solved by a law that says that you have to do this, because of the complexities of reciprocity. The local unions, for example, that have their own pension plans, have to somehow come under the national pension plan in order to actuarially provide for the back years of service credit for the individual who may have worked there.

I think that it is better that the individual international unions work this out with their own locals. It probably deserves more study, and I am sure it does, but if we institute a law that just says you have to provide protection regardless of where your members work, then we are in effect saying that all these local union plans have to become part of a national plan which may very well increase the cost of that plan so that the benefits for individuals may not be there.

Mr. PICKLE. Of course, a nationwide pension portability would solve all this problem, and would be a major step, perhaps, in these early years to take. But it does seem to me like you could at least take a first step that would have a requirement of intraunion portability and coverage, and you say that you would like to see them voluntarily provide for intertransfer between the unions, from one job to another. But you recommended that they volunteer doing it as compared to just thinking about it and not requiring it.

That is something else. Should we take that step, either by your administration, if you can do it, or by the Congress taking action to require this?

Mr. BURKHARDT. Well, taking an action to require it, as I said, would get us into the business of writing these reciprocity agreements and pulling all these assets into one national plan.

I think it is a lot better that the members of a union who go to their convention and vote on whether or not they want a national pension plan. They have that right, and let them work out the details of it.

I happen to be one who believes in national pension plans in certain industries that have the problem of seasonality and cyclical problems that move people around from job to job, and I am an advocate of increasing portability as much as possible, but I am not sure I am willing to take the step that we should provide it under law.

Mr. PICKLE. It seems to me like that is an unsettled area that needs to be addressed, and I would like to have your recommendation on what should be done, or if Congress should do anything about it.

Obviously, there is a gap, and it can be accomplished voluntarily, or if it can, that is fine, but it hasn't been accomplished, and I think we ought to look into it, because an awful lot of people lose their rights in shifting jobs.

Shifting jobs is as natural as breathing, especially in the construction industry.

Is there a need for a pension review board and for an administrative officer to provide a cheaper alternative than bringing a lawsuit? Somebody should, it seems to me, have a chance to look over these matters. Should there be a review board established?

Mr. BURKHARDT. You mean a national review board?

Mr. PICKLE. Yes.

Mr. BURKHARDT. I don't have a really strong view either way on that. I am not sure that we are not providing in terms of the ERISA program everything that a pension benefit review board would do, if it is a national one you are speaking of.

In our program, I think we have the capacity to provide these same services.

Mr. PICKLE. How about requiring in the area of portability complete reciprocity, either for a national plan, or an agreement among different plans for the same union, and require that?

Would that be an appropriate step?

Mr. BURKHARDT. It is an idea. Again, as I mentioned before, there are a number of union plans that already have arbitration procedures that can be implemented. Some 20 million people are covered by collective bargaining agreements of the 40 or 45 million under pension plans, and they do have a right to have an independent outside arbitrator, if they have one involved in their procedure, to take their benefit claims or appeals through that bargaining process.

I feel that is useful, and that is a useful option in terms of your suggestion. But the idea of instituting an appeals board or review board in every single instance, with independent parties—is that your suggestion?

Mr. PICKLE. No; not in every instance, but at least have one where it could be reviewed if it was needed. I wouldn't expect them to take action in every instance on 500,000 plans, but somebody, perhaps, ought to serve as an overall review agency or commission to look into the program. It seems to me a lot of good could come from a committee constituted for that purpose.

Mr. Chairman, I have another question on a particular union. I know my time is exceeded. I would like to come back to it.

Mr. GIBBONS. Yes..

Mr. Bafalis?

Mr. BAFALIS. Yes; thank you, Mr. Chairman.

The Government, in an effort coordinated by OMB has recently come up with proposals to solve the dual jurisdiction problems. Can you tell us what these proposals are and how they will particularly affect the ERISA capabilities and programs?

Mr. BURKHARDT. I don't know that they are OMB suggestions at this point, but I can tell you this, that I and my staff have been involved in discussions with the IRS over this very question.

As a matter of fact we have had a number of meetings, and we are attempting at the direction of the Secretary to work out administratively as many of these little jurisdiction problems as we can which will clearly define the areas of responsibility in each of the programs. I think something like than can be done.

Mr. BAFALIS. I am concerned over who would have authority over, particularly, prohibited transactions. Would you recommend that DOL have that, or that IRS keep that?

Mr. BURKHARDT. I am not going to recommend either way until we can work out the details with the Internal Revenue Service. I think that is something that we mutually have to decide on as well as taking a look at the total program.

I don't think that we can talk about one area, who should have authority over one area as opposed to the other in this context without bringing up the total program. That is really the way we are treating it with IRS and Treasury.

We are taking the whole program and deciding which areas and responsibilities in our minds make the most sense.

Mr. BAFALIS. It is my understanding, then, that no proposals have been made, and no determinations have been made as to how you are going to split the responsibility?

Mr. BURKHARDT. No final determinations; no.

Mr. BAFALIS. What are the prospective determinations? It is my understanding that some committees are aware of some determinations that have been made, and I am advised by staff that this committee has not been able to find out what those proposals are so far.

Mr. BURKHARDT. I was in the meetings with Treasury. I have not authorized anybody to discuss what our suggestions were. We are in the process of discussions now, and our propositions going back and forth are just tentative propositions.

I don't think they are really worth laying out on the table at this time until we can finalize them, and I don't know of anybody that has discussed them with any other committee.

Mr. BAFALIS. Do you think there should be overlapping jurisdictions, or specific jurisdictions to DOL and IRS?

Mr. BURKHARDT. I think as far as possible there should be individual jurisdictions. There were some ideas in the beginning that maybe the cross-fertilization idea and the overlapping was good, that it was a check or balance, and in the early days of the program that may have been a useful idea.

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