Final Rule Implementing Form T-1, the Trust Annual Report, Issued by Department of Labor

Number: 14-08 September 30, 2008

On October 2, 2008, the Department of Labor, Office of Labor-Management Standards (OLMS) will publish a Final Rule implementing the Form T-1, Trust Annual Report. The final rule is today being made available to the public on the OLMS Web site, at www.olms.dol.gov.

The Form T-1 is an annual financial disclosure report filed by labor unions about certain “trusts” in which they are interested. These trusts include, for example, building and redevelopment corporations, educational institutes, credit unions, labor union and employer joint funds, and job targeting funds. Labor unions will use the Form T-1 to disclose financial information about the trust, such as assets, liabilities, receipts and disbursements.

Not all labor unions with trusts will be required to file a Form T-1. Labor unions with total annual receipts of $250,000 or more will file this report. These are the labor unions that are currently required to file a “Form LM-2” labor union annual financial report.

For an organization or fund to be a labor union’s trust, the organization or fund must meet the following conditions.  It must be established by the labor union or have a governing body that includes at least one member appointed or selected by the labor union.  A primary purpose of the trust must be to provide benefits to the members of the labor union or their beneficiaries.

Not all labor union trusts are covered by the Form T-1 filing obligations.  A labor union must file a report if one of the following conditions is met.  The labor union, alone or in combination with other labor unions, appoints or selects a majority of the members of the trust’s governing board or the labor union’s contribution to the trust, alone or in combination with other labor unions, represents more than 50% of the trust’s receipts.  Contributions by an employer under a collective bargaining agreement are considered contributions by the labor union.

The Form T-1 final rule will take effect on 
January 1, 2009
.  The fiscal year of both the labor union and its trust must therefore begin on or after 
January 1, 2009
 for a Form T-1 report to be owed.  The Form T-1 covers the trust’s most recently completed fiscal year, that is, the fiscal year ending on or before the closing date of the labor union’s fiscal year.  The labor union must file the T-1 report within 90 days of the close of its fiscal year.

The following example illustrates how the Form T-1’s effective date works.  A labor union’s fiscal year begins 
January 1, 2009
 and ends 
December 31, 2009
.  Its trust’s fiscal year begins on 
October 1, 2009
 and ends 
September 30, 2010
.  The first fiscal year for which the labor union must file a Form T-1 is fiscal year January 1, 2010 to December 31, 2010.  That report would be due 90 days later, on 
March 31, 2011
.  The T-1 report would cover the trust’s October 1, 2009 to September 30, 2010 fiscal year.

The rule also provides that unions will not be required to file a Form T-1 under certain circumstances, such as when the trust is a political action committee, if publicly available reports on the committee are filed with appropriate federal or state agencies; an independent audit has been conducted for the trust, in accordance with standards set forth in the final rule; or the trust is required to file a Form 5500 with the Employee Benefits Security Administration (EBSA).

The final rule enhances financial reporting and provides union members with more complete information about union finances. Additionally, it will better protect union members’ rights to transparency and accountability under the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA).

More Information

Form T-1 Information Page

Form T-1 Final Rule (PDF)

Form T-1 Instructions (PDF) (HTML)

Facsimile of Form T-1 (PDF) Note: The facsimile may not be used for filing Form T-1.

Fact Sheet: Filing Form T-1 (PDF) (HTML)

Form T-1 PowerPoint Presentation: Filing Form T-1 (PowerPoint Show (pps) format – 1 MB)

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