Fringe Benefits Bond - Sheet Metal Workers Local Union No. 67 in Texas

Brief Summary

Contractors signing with SMART Sheet Metal Workers Local Union No. 67 can be required to guarantee their fringe benefit contributions before crews are dispatched. This bond does that without a cash deposit. You pay a premium, the bond runs to Local 67 and its benefit funds, and it stays in place for as long as you remain signatory.

The Fringe Benefits bond is posted by an employer signatory to a collective bargaining agreement with Sheet Metal Workers Local Union No. 67, which covers sheet metal work in Austin, San Antonio and surrounding areas of Texas. It guarantees the employer pays the fringe benefit contributions owed under the agreement to the union's local and national trust funds. The union and its funds set the required amount under the agreement.

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How to Apply for a Fringe Benefits Bond:

• Get the required bond amount and bond form from Local 67 or its fund administrator.
• Have the legal company name exactly as it appears on the signed Local 67 agreement.
• Owner names, home addresses and Social Security numbers for the credit review.
• Complete the bond application and review the quoted premium.
• Pay the premium and sign the indemnity agreement.
• Deliver the executed bond to Local 67 or its fund office as directed.

Detailed Information About the Texas Fringe Benefits Bond:

Contributions go to more than one fund

A Local 67 contractor does not write one benefits check. SMART explains that each local in many cases has its own trust funds, alongside national funds such as the Sheet Metal Workers' National Pension Fund, the International Training Institute, the National Energy Management Institute, the Sheet Metal Occupational Health Institute Trust and the Stabilization Agreement of the Sheet Metal Industry. SASMI benefits are funded by employer contributions based on member work hours, and the National Pension Fund is funded entirely by employer contributions negotiated under a collective bargaining agreement plus investment earnings. The fringe benefits bond guarantees that the contributions the agreement requires for each covered hour reach those funds.

Why a delinquency gets expensive

Under ERISA, 29 U.S.C. 1145, every employer obligated to contribute to a multiemployer plan under a collectively bargained agreement must make those contributions in accordance with the plan and the agreement. When a fund sues to collect and wins, 29 U.S.C. 1132(g)(2) requires the court to award the unpaid contributions, interest, the greater of a second interest award or the plan's liquidated damages, reasonable attorney's fees and costs, and other appropriate relief. A claim on the bond can include those amounts, up to the bond's full limit.

Who posts it

The principal is the employer signed to the Local 67 agreement for work in Austin, San Antonio and the surrounding area. The obligee is Sheet Metal Workers Local Union No. 67 and the benefit funds named in the agreement.

How the amount is set

The union and its funds set the bond amount under the collective bargaining agreement and the trust documents. Confirm the required amount, the current bond form and where to send it with Local 67 or its fund administrator before the bond is issued.

How premium is set

The surety prices the bond on the required amount, the contractor's financial statements and credit, the owners' personal credit, time as a signatory employer and any history of late contributions or payroll audit findings.

Eligibility and Requirements for a Texas Fringe Benefits Bond:

• Sheet Metal Workers Local Union No. 67 and its benefit funds named as obligee.
• Bond amount set by the union and funds under the collective bargaining agreement.
• Principal name matching the signatory employer on the Local 67 agreement.
• Company financial statements and owner credit for underwriting.
• Bond kept in force while the employer remains signatory.

Texas Fringe Benefits Bond FAQs:

Official and Additional Resources for the Texas Fringe Benefits Bond: