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Federal Register / Vol. 86, No. 248 / Thursday, December 30, 2021 / Rules and Regulations a short notice instead. Thus, in recognizing the Form 5500 as a nearly identical form, OLMS has through the Form T1, the commenter argued, indirectly required the sort of financial reporting that EBSA has already decided is not necessary due to the burden it creates.
Second, adding to the burden on the filing unions, the information necessary to complete the report is not in the control of the reporting union; it is in the control of the trust. Notwithstanding that many, if not most, of the trusts on which unions are required to report are operated jointly and equally with employers, the unions alone are forced to seek trust cooperation when such trusts are under no legal obligation to cooperate. The union has no ability to compel the trust to provide its records to the union for the sake of the unions reporting requirement. The 2020 rule offered no factual support suggesting that trusts, whose trustees have a fiduciary obligation to the trust participants and beneficiaries and not to the union, would agree to provide their records to the union. Compiling such records and providing them to the union could constitute a significant annual expense and a significant amount of lost time that should be devoted to the administration of the trust. It is unclear why trustees would approve complying with union requests, and it is equally unclear how a union could compel a trust that refuses to provide records to provide them.
In that regard, a number of union commenters indicated that the Department has underestimated the costly complications that arise from requiring labor organizations to acquire and accurately report information from trusts that are not required to comply with the LMRDA, making such a rule unjustified. One commenter indicated that the trust may simply choose not to comply. As the commenter explained, the trust is under no obligation to fulfil the unions request, and, therefore, the union may through no fault of its own be unable to comply with the Form T
1 reporting requirements despite a desire to do so. A trust could reasonably refuse to provide the union with the information requested based on its fiduciary obligation to beneficiaries if it were to determine that it is not an appropriate use of resources to track the necessary information or to turn that information over to the union. 10
10 While the 2020 rule argued that such concerns of fiduciary obligation would be resolved by the union fully compensating the trust for the resources and time it spent, a trust might nonetheless refuse to comply. Staff time and resources would nonetheless be delayed in real time, being kept from
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Another commenter cited how the preamble for the 2020 Form T1
justified the Form T1 reporting using cases where the administrators of plans on which unions would be required to report were guilty of preparing and filing false tax returns . . . and deliberately providing misleading and incomplete testimony. The very premise of the Form T1, the commenter reasoned, is flawed because the information supplied by the assertedly corrupt plans cannot be relied upon.
One commenter indicated how auditing the Form T1 will be practically impossible because the officers will not possess knowledge of the accuracy and completeness of information provided by the trust assuming it agrees to provide information and the union will not possess the underlying financial records that support the information the union was given by the trust. In such situations, the commenter argues, it is likewise unclear how labor organization officers are thus reasonably held responsible for maintaining records in sufficient detail to verify, explain, or clarify the accuracy and completeness of the reports, as the final rule required.
A union officer must sign the Form T
1 and do so under penalty of perjury;
however, as another commenter stated, officers would be forced to certify, under oath, as to their knowledge of the accuracy and completeness of information provided by a trust, even though they lack a sufficient basis to vouch for its accuracy. Ignoring these concerns, as the commenter put it, grossly discounts the costs of filing Form T1 reports on apprenticeship plans.
Third, in the NPRM, the Department considered and still considers the Form T1 reporting regime as imposing substantial and unjustified burdens from the perspective of multiple labor unions filing for a single shared trust.
The Department rejects this outcome as a matter of policy in light of the substantial burdens labor unions will face to submit these redundant reports, which in turn will impose significant their usual usage in furtherance of the trusts business of providing benefit to its members for the sake of another entitys legal obligation. A trustee with a fiduciary obligation could reasonably decline to comply merely so that staff and resources were not diverted from their duties. In other words, while the union might be able to compensate for lost time, and despite the longstanding adage to the contrary, money is not time. Work hours will be consumed, which could result in a trust being delayed in meeting its own financial filing obligations, such as completing the IRS 990 or the Form 5500. The trustee faced with the complicating factors could choose to avoid the complications and delays entirely.

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costs on the Department in terms of time and agency resources necessary to review those redundant reports. And even if, instead of multiple unions filing redundant, and thus unnecessary, forms for a single trust, the Department determined a means by which just a single union would file for the others, the result would be an arbitrary choice.
The Department would be forcing one union to take on all the legal obligations associated with the completion and signing of the form, even in situations where it would be especially arbitrary to do so, such as when the selected union has no more a share of authority over the trust than any of the other, nonfiling unions. This outcome would also impose costs on the Department in terms of needing to review redundant reports, which the Department now finds that, as a matter of policy, are not justified in light of those resource costs.
The 2020 rule acknowledged this problematic dynamic. The rule includes a provision allowing one union to file the Form T1 report for the other unions. However, the Department now considers that solution unworkable as a matter of policy. As one commentator explained, different unions will interpret the Form T1 reporting requirements differently and may therefore refuse to cede control of the reporting requirement to another for fear the report would be done incorrectly, resulting in the filing of duplicative reports despite the purported workaround. Furthermore, the due date for the Form T1 for different unions may be different because the contributing unions are not on the same fiscal year and thus unions are unlikely to risk noncompliance and substantial penalties by agreeing to let another union file on its behalf on a date after the first date any union related to a particular trust would be obligated to file the Form T1 were it solely responsible for filing. Another commenter indicated also how the burden on a minimally contributing union in such joint situations is patently unfair, their officers then being as personally responsible for the filing of a report and to require them to maintain data necessary to verify the reported information for at least five years . . .
even in situations where the labor organizations contribution is minimal.
Another concern is that, with many trusts that have multiple, non-affiliated unions contributing, the individual unions would likely be unable to determine if they together with the others effectively dominate the fund.
As one commenter indicated, unions in such arrangements will commonly not know the extent of another labor
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