Surety Bond Encyclopedia

Wage and Fringe Benefits Bond - U.a. Plumbing and Pipefitting Local No. 524 in Pennsylvania

Brief Summary

This bond backs the hourly contributions a signatory contractor owes the Pipefitters and Plumbers Local 524 benefit funds in northeastern Pennsylvania. Posting it up front costs a premium. Falling behind on contributions can end with a federal court ordering security equal to the entire delinquency, which is what happened to one Local 524 contractor in 2016.

Contractors who employ members of UA Local Union 524 post this wage and fringe benefits bond to protect the Pipefitters and Plumbers Local 524 benefit funds, administered from 711 E. Corey Street in Scranton. The bond guarantees the employer's payments to the pension, annuity, health and welfare and related funds. Confirm the current amount, bond form and obligee wording with the Local 524 Funds office before the bond is issued.

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How to Apply for a Wage and Fringe Benefits Bond:

  • Call the Local 524 Funds office at (570) 347-3256 for the current bond amount and form.
  • Get the exact trustee and fund names to be shown as obligee.
  • Provide the company's legal name, address and owner information for the surety's review.
  • Sign the indemnity agreement and pay the premium.
  • Return the executed bond to the Funds office at 711 E. Corey Street, Scranton, PA 18505.

Detailed Information About the Pennsylvania Wage and Fringe Benefits Bond:

Who posts it

UA Local Union 524 represents more than 800 plumbers and pipefitters working for mechanical and plumbing contractors in Lackawanna, Luzerne, Wyoming, Susquehanna, Wayne, Schuylkill, Monroe, Pike and Carbon counties, Bradford County east of the Susquehanna River, Berwick and vicinity in Columbia County, and part of Sullivan County. A contractor that signs on with Local 524 takes on the obligation to contribute to the Local 524 funds for every covered hour. This bond guarantees those payments.

Who the bond protects

The money at stake belongs to the Local 524 benefit funds, which are governed by boards of trustees. Collection suits brought by those trustees have listed the Pension and Annuity Plan, Health and Welfare Fund, Education Fund, Vacation Fund, Organizational Fund, Assessment Fund, Political Action Fund, Industry Advancement Fund and Community Fund. Get the exact fund names to be printed on the bond from the Funds office.

What a court can order instead

In Trustees of the Pipefitters and Plumbers Local 524 Pension and Annuity Plan v. Yannuzzi, Inc., No. 3:15-2085 (M.D. Pa. Aug. 25, 2016), the trustees asked the court to require the employer "to post a bond or other security acceptable to the plaintiffs equal to the amount of delinquent contributions," and to bar it from moving assets over $5,000 until that security was in place. The court granted the request. The same opinion applied interest at twelve percent per year under the funds' restated trust agreements.

The federal rules behind it

29 U.S.C. 1145 requires every employer obligated to contribute to a multiemployer plan to pay as the plan and agreement require. 29 U.S.C. 1132(g)(2) entitles the funds to unpaid contributions, interest, liquidated damages and attorney fees when they win a collection suit.

Getting the amount right

Call the Local 524 Funds office at (570) 347-3256 to confirm the current figure and form before you apply.

Eligibility and Requirements for a Pennsylvania Wage and Fringe Benefits Bond:

  • Obligee wording exactly as supplied by the Local 524 Funds office.
  • Coverage for contributions owed to the pension, annuity, health and welfare and related funds.
  • Bond amount confirmed with the Local 524 Funds office before issue.
  • Bond kept in force while the contractor employs Local 524 members.

Pennsylvania Wage and Fringe Benefits Bond FAQs:

Who is the obligee on a Local 524 fringe benefit bond?

The Local 524 Funds office supplies the exact wording. Collection suits for these funds are brought by their trustees and have listed the Pension and Annuity Plan, the Health and Welfare Fund and several smaller funds, so the bond may need to name more than one.

What area does Local 524 cover?

Northeastern Pennsylvania, including Lackawanna, Luzerne, Wyoming, Susquehanna, Wayne, Schuylkill, Monroe, Pike and Carbon counties, eastern Bradford County, the Berwick area of Columbia County and part of Sullivan County.

How much is the bond?

Confirm the current figure with the Local 524 Funds office at (570) 347-3256 before the bond is issued. Your signed agreement and the fund trustees control the amount and form.

What happens if a contractor falls behind on contributions?

The trustees can sue under ERISA for the unpaid amount, interest, liquidated damages and fees. In the 2016 Yannuzzi case the court also ordered the employer to post security equal to the full delinquency and barred it from moving assets over $5,000 without permission until that was done.

How is the premium decided?

The surety reviews the owner's credit and, on larger bonds, the company's financial statements. The premium reflects that review and the bond amount.

Official and Additional Resources for the Pennsylvania Wage and Fringe Benefits Bond:

Wage and Fringe Benefits in Other Pennsylvania Locations

Carpenters Combined FundsIBEW Local No. 126International Union of Painters No. 21Operating Engineers Local No. 66Plumbers Local Union No. 27Steamfitters Local Union 420

All U.a. Plumbing and Pipefitting Local No. 524 bonds · All Pennsylvania surety bonds