ACTEC Comments on Proposed Regulations Relating to Internal Revenue Code Section 2032.
The American College of Trust and Estate Counsel (the “College”) is submitting comments on proposed regulations relating to the election to value assets includable in a decedent's estate on the alternate valuation date under section 2032 of the Internal Revenue Code.
The College is a professional association of more than 2,500 lawyers from throughout the United States. Membership in the College is limited to those individuals who are elected by their peers on the basis of professional reputation and ability in the fields of trusts and estates law and on the basis of having made substantial contributions to these areas of the law through lecturing, writing, teaching, and bar association activities. College members have extensive experience in rendering advice to taxpayers on matters of federal transfer taxes and estate planning, with a focus on estate and gift tax planning and compliance.
The College supports the basic objectives of the proposed regulations under section 2032 and agrees that Treasury Regulation § 20.2032-1(c), in its present form, invites potential abuse and warrants clarification, revision, or both. The College agrees with many provisions of the proposed regulations and applauds the elimination of potential loopholes that may now exist under a distorted interpretation of the current regulations.
The College is concerned, however, that the proposed regulations are an overreaction to the Tax Court Memorandum Decision in Kohler v. Commissioner, T.C. Memo. 2006-152, and will result in an unfair application to some taxpayers unless portions of the proposed regulations are revised. fu addition, the College has some suggestions to clarify several provisions of the proposed regulations.
• Because of the lack of a definition of outside the control of the decedent under proposed regulation § 20.2032-1(f)(1), the potential application of the rules under proposed regulation § 20.2032-1(f)(3) to reorganizations could be overly broad.
The term market conditions is defined as events outside of the control of the decedent (or the decedent's executor or trustee) or other person whose property is being valued that affect the fair market value of the property being valued.
The College is concerned that, during examinations, this phrase will be given a much broader definition than intended. One extreme example is where the decedent grants his or her executor a power of sale over estate assets and the executor fails to sell marketable securities that decline in value during the six month period following the decedent's death. The executor's failure to sell the marketable securities is not outside the control of the decedent's executor since the executor had the power of sale. Accordingly, it is possible that the use of the term “outside the control” in proposed regulation § 20.2032-1(f)(1) may have unintended consequences without the use of a more definitive standard, such as the standard that we discuss later in this letter.
In the Background to the proposed regulations, there is a discussion of the Tax Court Memorandum Decision in Kohler v. Commissioner, which may have prompted the issuance of the proposed regulations. Because the College is confident that some taxpayers will attempt to distort the decision in Kohler to support an inappropriate reduction in alternate valuation, the College believes that the concerns about Kohler are legitimate. The proposed regulations, however, use a meat cleaver approach to solving the problem when the proposed regulations should have used a scalpel.
The legitimate concern about the Kohler decision is its possible extension to post-mortem entity formations or post-mortem fractionalizations of interests which have no legitimate and substantial business (including investment) purpose - in effect the creation of valuation discounts for the primary purpose of lowering transfer taxes. In contrast, the facts in Kohler do not appear to be abusive. Although the closely held company in question was reorganized after the decedent's death and his personal representative would have been able to elect a cash option or pursue dissenters' rights, the negotiations commenced well before the decedent's death, and there appeared to be very valid business purposes for the reorganization. In addition, it appears that the reorganization may have been finalized irrespective of any action taken by the decedent's estate, and a prudent fiduciary may very well have preferred the stock of a very successful closely held business to other investment options which would have been available if one of the cash options had been elected.
The College requests that you carefully review the rules applicable to post-mortem reorganizations, particularly reorganizations involving public companies. Reorganizations serve a valid and viable business purpose and in our increasingly fast paced business environment may become more common. Taxpayers should generally be allowed the benefits granted by Congress.
The tax laws already include very substantial safeguards against abuse involving reorganizations.
First, any corporate organization must be supported by a valid business purpose.Treas.Reg. § 1.368-2(g). This income tax requirement applies equally to acquisitive reorganizations, such as combinations of businesses, and to nonacquisitive reorganizations, such as the recapitalization in Kohler. Such a business purpose requirement goes materially beyond the basic safeguards provided by Chapter 11 and Chapter 12 and should significantly reduce the potential for any tax abuse.
Second, the proposed regulations focus on the estate's possible election to take a cash option in lieu of stock in the reorganized company, as in Kohler. That is the only apparent basis for asserting that a minority shareholder, as in Kohler, has sufficient “control” to cause the transfer restrictions imposed on the estate's stock as part of the reorganization to be considered as not being the result of market conditions. Cash options are not limited to those provided under the express terms of a reorganization, however. Because dissenters' rights apply to most reorganizations under state law, almost every reorganization would include a cash option (whether granted under the reorganization or required by state law) and would run afoul of the proposed regulationsunder section 2032. The potential applicability of the control standard in the proposed regulation is thus much more widespread than may be initially apparent, and goes much further than is necessary. The income tax laws already impose a substantial barrier against abuse in the form of constructive receipt principles. The response to the Kohlerdecision in the proposed regulations goes materially beyond what has generally been regarded as the appropriate standards for determining constructive receipt for income tax purposes in a corporate reorganization setting. There are valid reasons for the constructive receipt boundaries in an income tax context. There are equally valid reasons for not exceeding those boundaries in an estate tax context.
The College believes that the business purpose and constructive receipt principles, by themselves, should generally provide sufficient safeguards to police potential abuse from corporate reorganizations. To the extent that a reorganization is regarded as abusive, notwithstanding these safeguards, the Internal Revenue Service should still be able to fall back on section 2703. Unless the transfer restrictions imposed as part of the reorganization represent a bona fide business arrangement, are not a device to transfer property to members of the decedent's family for less than adequate and full consideration, and are comparable to similar arrangements entered into by persons in an arm's length transaction and are thus excepted under section 2703(b), such transfer restrictions would be disregarded for purposes of determining the alternate value of the estate's stock or equity interest subject to such transfer restrictions. Section 2703should be a very effective backstop for corporate reorganizations and a very effective deterrent of abuse in regard to all reorganizations.
In addition to these legal considerations, the proposed regulations pose practical problems. If the reorganization involves a combination of entities, in many if not most instances, it would be almost impossible to determine the alternate value of the assets traceable to any of the combined entities. Any attempt to untangle the combined assets and then value those attributable to the respective entities which were parties to the combination would be totally impractical and speculative. This would create an administrative nightmare and would mean that an estate would not be able to elect the congressionally mandated benefits of section 2032.
As a further practical consideration, marketable securities are materially less likely to pose concerns than equity interests in closely held entities, but the proposed regulationsdo not distinguish between public companies and closely held companies. If anything, the ready market for marketable securities may make it more likely that any changes in the value of such marketable securities resulting from a reorganization of a public company are within the “control” of the estate, which could sell such marketable securities at any time, and thus may be regarded as changes not resulting from market conditions under the proposed regulations. This would be an anomalous result. At a minimum, any change in value caused by a post-mortem reorganization of a company whose shares are publicly traded should be presumed to be caused by market conditions.
Overall, the College believes that Treasury and the Internal Revenue Service should not be overly concerned about a reorganization with a business purpose sufficient to qualify as a reorganization under section 368. The availability of a cash option under the reorganization or dissenters' rights under state law should make no difference. The business purpose and constructive receipt principles applicable to a reorganization, backstopped by section 2703, should be more than sufficient to police abuse even by an estate which has the power, acting unilaterally, to determine the terms of a post-mortem reorganization and to cause such reorganization to be consummated. In the instances the Internal Revenue Service regards as abusive, the Service should be able to challenge the restrictions under section 2703 without casting an unduly wide net under the section 2032 regulations.
Accordingly, the College requests that you carefully review the rules applicable to postmortem reorganizations.
(c) a legitimate and substantial business (including investment) purpose other than carrying out the dispositive terms of the decedent's will, revocable trust, or other controlling instrument.
Any change in value resulting from a reorganization would be regarded as a change resulting from market conditions, except to the extent of any cash or other property received pursuant to the reorganization and not treated as excluded property under regulation § 20.2032-1(d).
Under any circumstances, much more should be required than a mere ability to sell, which could be construed as the standard for determining control under the proposed regulations. If the decedent or his or her estate does not have the unilateral power to cause an event to happen, or at least to block an event from happening, any change in value resulting from that event should be considered as resulting from market conditions.
In regard to the other areas addressed in the proposed regulations, the College shares the concerns addressed by the proposed regulations of the Service with certain qualifications.
1. Post-Mortem Entity Formation. In regard to the post-mortem formation of corporations, partnerships, and limited liability companies, the College fully recognizes the potential for abuse. In some instances, however, the formation of an entity, especially where one or more operating businesses are involved, may resemble acquisitive reorganizations. For example, both sections 351 and 368could apply to certain transactions. For the reasons stated above, the College encourages the adoption of rules for such entity formations similar to the rules applicable to reorganizations. Absent a compelling business purpose, however, the College would not take exception to any reasonable approach to curtailing the abusive post-mortem formation of entities that does not involve use of a control standard. In this regard, the College recognizes that the Internal Revenue Service's ability to challenge a post-mortem entity formation would probably be limited undersection 2703, thus warranting special scrutiny under the final section 2032regulations.
2. Post-Mortem Distributions from Entities. The College suggests that theproposed regulations contain clarification regarding distributions from an entity after death. The College believes that any distribution during the six-month period following death, with a record date after the date of death, should not be added back to the assets held by the entity for purposes of determining the alternate value of an interest in an entity so long as the distribution is consistent with historic distributions or is from post-mortem earnings of the entity. If a decedent personally owned income producing real estate, the net rents from such real estate for the six months after death would not be includible for purposes of determining the alternate valuation date value of the real estate. Why should the results be any different if the real estate is held by a corporation or other entity in which the decedent owns an interest as of his or her death?
Under Treasury Regulation § 20.2032-1(d), post-mortem distributions attributable to an entity's post-mortem earnings are “excluded property.” In contrast, the proposed regulations could be construed as requiring that the alternate value of an interest in an entity be determined by treating the entity as holding on the alternate valuation date all post-mortem distributions of cash or other property to the estate from such entity. The College suggests that the approach taken in regard to the entity distribution provisions of Treasury Regulation § 20.2032-1(f), when finalized, should, at a minimum, be consistent with the approach taken in Treasury Regulation § 20.2032-1(d). Post-mortem distributions attributable to an entity's post-mortem earnings should not be taken into account in determining the alternate value of the estate's interest in the entity.
3. Distribution of Fractional Interests. The College supports the effective disallowance of fractionalization discounts resulting from distributions of fractional interests in an entity or the distribution of undivided fractional interests in real estate. See Examples 4 and 5 of Prop. Reg. Sec. 20.2032-1(f)(3)(ii).
PREMIUMS AS WELL AS DISCOUNTS.
A change in value resulting from market conditions should apply to increases in value as well as to decreases in value. For example, if an estate holds only a minority interest in an entity as of the decedent's date of death but for valid business (or investment) reasons acquires an additional interest within six months after the date of death, resulting in the aggregate in a controlling interest held by the estate, the alternate value should be determined on a minority interest basis.
A cross reference to section 2703 would be appropriate if reorganizations are excepted from the normal rules.
Similarly, the College recommends that the preparation of these regulations in final form be coordinated with the promulgation of proposed and final regulations under section 2704(b)(4) (item 13 under the heading “Gifts, Estates and Trusts” on the Treasury-IRS Priority GuidancePlan for the 12 months beginning July 1, 2007), so as to provide for the treatment of the object of those regulations in a comprehensive and consistent manner.
Example 3 of proposed regulation § 20.2032-1(f)(3)(ii) is unusually complicated, involving the creation of four limited partnerships in which the estate has a 25 percent interest. The reciprocal relationship between four and 25 percent seems to have no relevance to the point of the example and therefore is merely a distraction that could limit understanding of the example. An example with just one partnership would seem to work just as well and would avoid the problem.
The College supports for the most part the concepts set forth in the proposed regulations. The College is concerned, however, that the proposed regulations may create new problems and are an over-reaction to the Kohler decision.
We thank you for giving us this opportunity to provide these comments. The two individuals primarily responsible for the preparation of the comments, Mr. Milford B. Hatcher (404.581.8510; mbhatcher@jonesday.com) and Mr. Dennis I. Belcher(804.775.4304; dbelcher@mcguirewoods.com), are available to answer your questions.Mr. Ronald D. Aucutt, Mr. Steven B. Gorin, and Mr. Bruce Stone also participated in the preparation of the comments.


Before HENRY, BARRETT, and MURPHY, Circuit Judges.
Appellant, Victor C. Wheeler, pleaded guilty to a charge of brandishing a firearm during a crime of violence in violation of 18 U.S.C. § 924(c)(1)(A)(ii). Wheeler was originally sentenced to a term of 106 months' imprisonment. Wheeler appealed and this court instructed the district court to vacate Wheeler's sentence and resentence him. See United States v. Wheeler, 230 F.3d 1194 (10th Cir. 2000). On remand, Wheeler was resentenced to ninety-two months' incarceration. Wheeler then brought the appeal currently before this court, arguing the district court erred when it departed upward from the minimum mandatory sentence of eighty-four months. Exercising jurisdiction pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a), this court remands to the district court for resentencing.
Except to the extent that a greater minimum sentence is otherwise provided by this subsection or by any other provision of law, any person who, during and in relation to any crime of violence . . . for which the person may be prosecuted in a court of the United States, uses or carries a firearm, or who, in furtherance of any such crime, possesses a firearm, shall, in addition to the punishment provided for such crime of violence . . . if the firearm is brandished, be sentenced to a term of imprisonment of not less than 7 years . . . .
The application notes to § 2K2.4 state that, "[a] sentence above the minimum term required by 18 U.S.C. § 924(c) . . . is an upward departure from the guideline sentence." U.S.S.G. § 2K2.4, cmt. n.1 (2000). Thus, the ninety-two month sentence imposed by the district court at Wheeler's resentencing is an upward departure under the guidelines because it exceeds eighty-four months.
(1) whether the factual circumstances supporting a departure are permissible departure factors; (2) whether the departure factors relied upon by the district court remove the defendant from the applicable Guideline heartland thus warranting a departure, (3) whether the record sufficiently supports the factual basis underlying the departure, and (4) whether the degree of departure is reasonable.
United States v. Collins, 122 F.3d 1297, 1302 (10th Cir. 1997). These four questions are reviewed under a unitary abuse of discretion standard with legal conclusions reviewed de novo and findings of fact reviewed for clear error. See United States v. Duncan, 242 F.3d 940, 944 (10th Cir. 2001).
The application notes to § 2K2.4 specifically allow a sentencing court to base an upward departure on "the seriousness of the defendant's criminal history." U.S.S.G. § 2K2.4, cmt. n.1 (2000). When the district court resentenced Wheeler to ninety-two months' imprisonment, it stated, "the Court finds pursuant to Section 2K2.4, application note 1, of the guidelines that an upward departure is warranted in this case because of the Defendant's criminal history." Thus, the ground upon which the district court based the departure is a permissible departure factor.
Once the district court identifies a permissible departure factor, it must then determine whether the factor moves the defendant outside the applicable guideline heartland. See Collins, 122 F.3d at 1303. The district court must first determine what constitutes a guideline's heartland, and must then identify the factual basis for a conclusion that the instant case is atypical. See id. at 1304; see also United States v. Sicken, 223 F.3d 1169, 1173 (10th Cir. 2000). Wheeler argues that the district court made no factual findings to support its conclusion that his criminal history supported an eight-month upward departure and the government concedes error on this point. We agree with the parties that the lack of factual findings makes it impossible for this court to review the district court's conclusion that Wheeler's criminal history takes him outside the heartland of defendants convicted of violating 18 U.S.C. § 924(c)(1)(A)(ii) and sentenced pursuant to U.S.S.G. § 2K2.4(a)(2). We must, therefore, remand for resentencing.
On remand, the district court will be guided by the application notes to § 2K2.4, one of which specifically prohibits a court from applying Chapter Four of the guidelines when sentencing a defendant pursuant to § 2K2.4. See U.S.S.G. § 2K2.4, cmt. n.3 (2000) ("Do not apply . . . Chapter Four (Criminal History and Criminal Livelihood) to any offense sentenced under this guideline."). Chapter Four contains guidelines relating to the calculation of a defendant's criminal history category. Thus, although a Presentence Investigation Report ("PSR") containing a calculation of Wheeler's criminal history category was prepared before Wheeler's initial sentencing, that calculation will be of limited use during the resentencing.
Consistent with Application Note 1, the district court may consider only the seriousness of Wheeler's criminal history and determine whether it takes him outside the heartland. See id., cmt. n.1 (2000). Thus, substantive information contained in the PSR relating to the nature of Wheeler's criminal history can be considered by the district court. The court must identify the specific details of that history that take Wheeler outside the heartland. As an example, Application Note 1 suggests that a defendant whose serious criminal history would have resulted in his classification as a career offender if § 4B1.1 of the guidelines applied, may be outside the heartland. See id. ("A departure may be warranted . . . in a case in which the defendant is convicted of an 18 U.S.C. §924(c) . . . offense and has at least two prior felony convictions for a crime of violence or a controlled substance offense that would have resulted in application of § 4B1.1 (Career Offender) if that guideline applied to these offenses.").
I agree that if this was a guideline case that the guideline range would be 77 to 96 months. Now, if you spread over that guideline range six criminal history category levels, you come out with approximately three months per level. And at criminal history category 5 that means you take three months, multiply it times five, to reach a 15 month--I don't know that it's 15 months of anything. It's just a 15 month figure. If you add that 15 month figure to the 77 month bottom guideline sentence, and that equals a 92 month sentence, which in effect is an  month sentence departing from the 84 month mandatory minimum.
We agree that the district court's explanation of the methodology it used does not provide this court with a sufficient basis upon which to determine whether the degree of the departure was reasonable.
While the district court employed a methodology capable of being reduced to a mathematical formula, the proper focus is not on crafting such a formula. A sentencing court, instead, must "specifically articulate reasons for the degree of departure using any reasonable methodology hitched to the Sentencing Guidelines, including extrapolation from or analogy to the Guidelines." United States v. Bartsma, 198 F.3d 1191, 1196 (10th Cir. 1999) (quotation omitted). While the district court's methodology was ostensibly hitched to the guidelines, the court simply spread the difference between the low and high ends of the hypothetical guideline range over the total number of possible criminal history categories. This mathematical formula, standing alone, is not an appropriate use of the guidelines to justify the degree of an upward departure. If, on remand, the district court again departs upward, it must support the degree of that departure with an appropriate and reviewable explanation.
This court remands to the district court to vacate Wheeler's sentence and resentence him consistent with this opinion.
1.Neither party argues that the application of the current version of U.S.S.G. § 2K2.4 at Wheeler's resentencing violated the Ex Post Facto Clause.


Section 9. Electronic Protected Health Information (ePHI).
Section 21. International Union or “SMART”.
Section 2. Amount of Benefit.
Section 3. Application for Advance Payment of Supplemental Unemployment Benefit.
Section 14. Uniform Limitations Period.
SECTION 1. PURPOSE OF PLAN. The plan of benefits as set forth herein represents the Rules and Regulations adopted by the Trustees of the National Stabilization Agreement of the Sheet Metal Industry Trust Fund to implement the design and purpose of the Fund to provide benefits to supplement unemployment compensation payments by a State System and other benefits described in IRC Section 501(c)(9) for Employees.
Employers to the Plan and Benefits paid under the Plan shall not be considered part of an Employee's wages.
Unless the context or subject matter otherwise requires, the following definitions shall govern in these Rules and Regulations. The masculine gender includes the feminine and neuter genders and a singular noun includes the plural and vice versa.
SECTION 1. ADMINISTRATOR. The term “Administrator” means the person or his successors selected by the Trustees to administer SASMI on a day-to-day basis and to execute the policies and duties delegated or assigned by the Trustees in accordance with the Trust Agreement.
SECTION 2. AVERAGE HOURLY WAGE. The term “Average Hourly Wage” means the average of all straight time rates of pay required to be paid to an Employee for work under a Contract during the Stabilization Period for which he is applying for a Benefit, except as provided below.
When wages are paid at a rate lower than the building trades’ journeyman contractual regular wage rate in the Local Union due to the use of the International Union's Resolution 78 but Contributions are negotiated using the regular wage rate in the Local Union, the wage rate shall be the building trades’ journeyman contractual wage rate on which the amount of Contributions are calculated.
If no work was performed during the Stabilization Period, the wage rate is the average of all contractual rates of pay for an hour of work at straight time for an Employee’s job classification in the applicable Contract in effect in the Employee's Home Local Union during the Stabilization Period for which a Benefit is payable.
SECTION 3. BENEFIT. The term “Benefit” means the amount paid or payable from the Plan to an Employee or his family or beneficiaries for benefits described in IRC Section 501(c)(9) under these Rules and Regulations.
an agreement between the Trustees and a Related Organization for contributions to SASMI and related benefits to full-time employees of the Related Organization. Such Contributions shall count towards establishing eligibility however they shall not count towards benefits under Articles III, IV, V, VI, and VIII.
The term “Contract” shall not include a collective bargaining agreement, participation agreement or other agreement containing provisions which the Trustees determine, in their sole discretion, would adversely affect the actuarial standards and/or the financial integrity of SASMI and is not acceptable to the Trustees.
SECTION 5. CONTRIBUTIONS. The term “Contributions” means, unless otherwise directed by the Trustees, the periodic payments made or that are required to be made to SASMI under a Contract, directly or through a Local Fund.
Amounts contributed for benefits provided by the SASMI Production & Industrial benefit schedules before 2014 (for Article IX benefits before 2013) are not Contributions for purposes of calculating benefits under this Plan.
Unless specifically stated otherwise, Contributions paid to SASMI under a Contract requiring contributions for HCRA Plan B do not count as Contributions for purposes of determining benefits under this Active Plan.
SECTION 6. COVERED EMPLOYMENT. The term “Covered Employment” means work under a Contract for which Contributions to SASMI are required.
SECTION 7. DEATH BENEFIT. The term “Death Benefit” means payments under Article VIII or, as to a Production and Industrial Employee Benefit Schedule, Article IX, Section 9.
SECTION 8. DISABILITY. The term “Disability” means a physical condition which prevents an Employee from performing the principal functions required of an Employee in the Sheet Metal Industry.
SECTION 9. ELECTRONIC PROTECTED HEALTH INFORMATION (Electronic PHI).
The term “Electronic Protected Health Information” means information defined in accordance with 45 CFR § 160.103.
an employee who is an employee of a Related Organization for whom Contributions are required to be paid under the terms of a Contract.
The term “Employee” shall not include an employee of an employer who has been terminated by the Trustees as an Employer in SASMI, even if the employer has agreed to contribute to SASMI.
SASMI (if it chooses to provide Benefits to its employees).
The term “Employer” shall not include an employer whose status as a contributing Employer has been terminated by the Trustees.
SECTION 12. ERISA. The term “ERISA” means the Employee Retirement Income Security Act, codified as 29 U.S.C. §1001 et seq., as amended.
SECTION 13. FUND; TRUST FUND. The terms “Fund” and “Trust Fund” shall mean the National Stabilization Agreement of the Sheet Metal Industry Trust Fund. Further it shall mean the monies and other items of value which comprise the corpus and additions thereto, contributions payable to the fund, amounts received or held for or on behalf of the Trustees as well as title to all such monies, and other items of value including contributions owed but not yet received, which shall be vested in the Trustees.
forfeited eligibility or qualification for Benefits under Article X and worked at least 100 hours with paid Contributions or received a benefit. The time for which an Employee retains eligibility during military service under Article II, Section 4(c) shall be included in future service. For purposes of the Severance Benefit, there are no additional Future Service Credit accruals after December 31, 2009. Contributions paid under a Contract requiring contributions to HCRA Plan B do not count towards Future Service Credits under this Active Plan.
SECTION 16. HIPAA. The term “HIPAA” means the Health Insurance Portability and Accountability Act of 1996, as amended.
SECTION 17. HOME LOCAL UNION. The term “Home Local Union” means the Local Union of which an Employee is a member. If he is not a union member, it means the Local Union which represents the Employee for purposes of collective bargaining in the primary geographic area in which the Employee is employed. If an Employee transfers or otherwise changes his membership from one Local Union to another Local Union, his new Local Union shall become his Home Local Union.
SECTION 18. HOURS. The term “Hours” means the number of hours for which Contributions actually are paid to SASMI unless the Trustees direct otherwise. Unless specifically stated otherwise, Contributions paid to SASMI under a Contract requiring contributions for HCRA Plan B do not count as Hours for purposes of determining benefits under this Active Plan.
SECTION 20. INDUSTRY HOURS. The term “Industry Hours” means hours worked in any employment in the Sheet Metal Industry.
SECTION 21. INTERNATIONAL UNION OR “SMART.” The term “International Union” or “SMART” means the International Association of Sheet Metal Air Rail and Transportation Workers, AFL-CIO, after the merger of the Sheet Metal Workers’ International Association (“SMWIA”) and the United Transportation Union, and the SMWIA only before that date.
SECTION 22. IRC. The term “IRC” means the Internal Revenue Code of 1986, codified as Title 26, U.S.C., as amended.
§186(c)(5) or other entity created by a collective bargaining agreement which is empowered to enter into an agreement whereby Contributions from Employers shall be transmitted, directly or indirectly, to SASMI for the purpose of securing the benefits of participation in SASMI for the Employees of such Employers. No trustee, administrator, or other person empowered to act on behalf of a Local Fund shall, by reason of his position with such Local Fund, be entitled to act on behalf of SASMI or in any manner to exercise any discre- tionary power with regard to SASMI.
SECTION 24. LOCAL FUND AGREEMENT. The term “Local Fund Agreement” means an agreement between SASMI and a Local Fund which provides for the transmittal of Contributions to SASMI for the payment of Benefits to the Employees of those Employers whose Contributions are so transmitted and received by SASMI. The agreement shall provide that each Employer whose Contributions are transmitted and received under the agreement shall have the same rights and obligations as any other Employer contributing to SASMI. The Employees of such Employers shall have the same rights and obligations as any other Employees of contributing Employers.
SECTION 25. LOCAL UNION. The term “Local Union” means any local union of the International Union.
SECTION 26. MINIMUM HOURS. The term “Minimum Hours” means the number of hours per week for which an Employee can receive straight time wages before receipt of overtime under a Contract applicable to his work.
SECTION 27. OWNER. The term “Owner” means a stockholder, officer, director, sole proprietor, partner, principal, trustee or beneficiary or other person with an ownership interest or powers similar to the officers or directors of a corporation whether in an incorporated or unincorporated business.
SECTION 28. PAST SERVICE CREDIT. The term “Past Service Credit” means each calendar year, prior to the Employee’s first year of Future Service Credit, during which he was a member of the International Union. To the extent required by applicable federal law, military service will also be included in Past Service Credit. Effective December 31, 2009, no further Past Service shall be granted for Severance Benefits. For Purposes of this definition an individual is considered as having become a “member of the International Union” upon Grant of Membership to the International Union, which is the date when the individual began to pay Per Capita dues to the International Union, under the rules in existence at the time of admission.
SECTION 29. PLAN. The term “Plan” means the plan of benefits as set forth in these Rules and Regulations, including any amendments, modifications or restatements hereof.
Industrial Employer” means an employer in the production or industrial sectors of the Sheet Metal Industry who has operated or who now or hereafter operates under a Contract and includes all employers who contributed to SASMI-II as long as they retain an obligation to contribute to SASMI.
Health Information” is defined in accordance with 45 CFR §164.501.
SECTION 32. QUALIFIED MILITARY SERVICE. The term “Qualified Military Service” means a period of service in the uniformed services (as defined in Chapter 43 of title 38, United States Code or prior federal law, including any limits on the duration of an absence or required service credit), by any individual if such individual returns to work with the Employers within the time provided by applicable law.
SECTION 33. RELATED ORGANIZATION. The term “Related Organization” means a Local Union, the International Union, an affiliated or reciprocal trust fund or employee benefit plan, an employer association or an Employer (with respect to employees not covered under a collective bargaining agreement) which can contribute to SASMI under 29 C.F.R. Section 2510.3-40 without impairing the collectively bargained status of SASMI. The Trustees may allow participation by other employers, who shall be treated as related organizations, at their discretion.
SECTION 34. RELATIVE. The term “Relative” means the spouse of an Employee and the parents, grandparents, children and brothers and sisters of an Employee or spouse.
SECTION 35. SASMI. The term “SASMI” means the Fund, Trustees or Plan, jointly or severally as appropriate in context.
SECTION 36. SASMI GROUPS. The term “SASMI Groups” means the group or classification of an Employee for a calendar year based on the average Hours of active employees in his Home Local Union in the prior Plan Year and the following table.
the passage of twelve (12) consecutive months with no Contributions (including no Contributions under a Contract requiring Contributions to Plan B HCRA) for work by an Employee.
SECTION 38. SEVERANCE BENEFIT. The term “Severance Benefit” means payments under Article VII.
SECTION 39. SHEET METAL INDUSTRY. The term “Sheet Metal Industry” means any and all types of work within the trade jurisdiction of the Sheet Metal, Air, Rail and Transportation Workers, Sheet Metal Division (“SM”), as described in its Constitution or an amendment thereto; or any other work to which a worker has been assigned, referred, or can perform because of skills and training as a sheet metal worker.
SECTION 40. STABILIZATION PERIOD. The term “Stabilization Period” means January 1 through June 30 (Stabilization Period A) or July 1 through December 31 (Stabilization Period B) of any calendar year.
SECTION 41. STATE SYSTEM. The term “State System” means a state agency as defined in 26 U.S.C. §3306(e) and the unemployment fund under its administration.
The Local Union and the Employer agree to adopt the Trust Agreement and Plan.
“Supplemental Unemployment Benefit” means payments under Article III.
SECTION 44. TEMPORARY DISABILITY. The term “Temporary Disability” means a Disability of eighteen (18) months or less.
SECTION 45. TRAVEL BENEFIT. The term “Travel Benefit” means payments under Article VI.
SECTION 46. TRUST AGREEMENT. The term “Trust Agreement” means the Agreement and Declaration of Trust establishing the Fund, including any amendments, modifications and restatements thereof.
SECTION 48. UNDEREMPLOYMENT. The term “Underemployment” means unemployment or work by an Employee under a Contract in the Sheet Metal Industry below his Group Hours for a Stabilization Period.
SECTION 49. UNDEREMPLOYMENT BENEFIT. The term “Underemployment Benefit” means payments under Article IV.
SECTION 50. WELFARE BENEFIT. The term “Welfare Benefit” means payments under Article V or Health Benefits under prior Plan documents (Rules and Regulations).
SECTION 51. YEARS OF SERVICE. The term “Years of Service” means an Employee’s Future Service Credit and Past Service Credit. For purposes of the Severance Benefit, there are no Years of Service after December 31, 2009.
SECTION 1. INITIAL ELIGIBILITY. An Employee must satisfy the initial eligibility rules of the Plan before payment of Benefits will be provided under the Plan. An Employee’s initial eligibility commences upon the completion of 1,200 Hours within any twelve (12) consecutive months, 2,000 Hours within any twenty-four (24) consecutive months, or 2,800 Hours within any period of time. Such initial eligibility shall entitle an otherwise qualified Employee to the payment of Benefits provided he meets all other requirements for such benefits.
SECTION 2. RENEWAL OF ELIGIBILITY. After acquiring initial eligibility and losing eligibility, an Employee may again become eligible upon the completion of 1,200 Hours within any twelve (12) consecutive months, 2,000 Hours within any twenty-four (24) consecutive months, or 2,800 Hours within any period of time after the first date Contributions were made for his work after a termination of eligibility.
SECTION 3. RECYCLING OF ELIGIBILITY. An Employee who has received Benefits (other than Travel Benefits) in one (1), two (2) or three (3) Stabilization Periods may recycle his eligibility by completing 1,200 Hours within any twelve (12) consecutive months, 2,000 Hours within any twenty-four (24) consecutive months, or 2,800 Hours within any period of time after the last Stabilization Period in which Benefits were received and by not receiving any Benefit for the Stabilization Periods in which the Hours are worked.
An Employee who accepts a full-time position, either elected or appointed, with any Local Union or the International Union shall not lose eligibility. An Employee will not be considered available for work and eligible for Benefits while employed nor thereafter unless he returns to work under a Contract in the Sheet Metal Industry or is available for and seeking work under a Contract within one-hundred twenty (120) calendar days following the termination of his employment with the Local Union or the International Union. The Employee may be eligible for a Severance Benefit if he has a Severance as a result of termination of work with the Local Union or International Union.
An Employee with a Temporary Disability because of an accident, injury or illness shall continue eligibility and qualification for Welfare Benefits only. Eligibility will be lost if the Employee does not return to Covered Employment within eighteen (18) months of the accident, injury or illness.
An Employee who enters Qualified Military Service and returns to work under a Contract in the Sheet Metal Industry or is available for and seeking work under a Contract within the time limits required by law following his discharge from Qualified Military Service shall be considered to have earned those Years of Service immediately prior to returning to work under a Contract (or being available for said work). An individual will not be eligible for Benefits from this Plan while in military service unless so required by applicable federal law.
An Employee will not lose eligibility where the Contract of the Local Union under which the Employee had been working terminated and the Local Union has again become a party to a Contract within a reasonable period of time from termination, as determined by the Trustees.
An apprentice Employee who participates in his Home Local Union's Youth to Youth apprentice training program and resumes employment or is available for and seeking work under a Contract within one month of termination of his participation in such Youth to Youth Program shall not lose eligibility.
An Employee who becomes an Owner of a business in the Sheet Metal Industry with a Contract does not lose eligibility. An Employee will not be considered available for work and eligible for Benefits while he is an Owner nor thereafter unless he returns to work under a Contract in the Sheet Metal Industry or is available for and seeking work under a Contract in the Sheet Metal Industry within one-hundred twenty (120) calendar days following the termination of work as an Owner. The Employee may be eligible for a Severance Benefit if he has a Severance as a result of termination of work as an Owner of a business in the Sheet Metal Industry with a Contract. An Employee who becomes an Owner of a business with a Contract requiring contributions to HCRA B does not maintain eligibility under this paragraph.
SECTION 5. OWNERS AND RELATIVES. Notwithstanding anything else in the Plan, an Owner or Relative of an Owner is not eligible for Benefits unless he satisfies the requirement of this section as well as the basic eligibility requirements.
An Employee who is an Owner of a business in the Sheet Metal Industry and performs work under the Employer's Contract is not eligible unless his Employer makes Contributions on the Minimum Hours or the number of hours he actually works in Covered Employment, whichever is greater. The Employer must pay Contributions based upon an hourly rate equal to or greater than the regular wage rate on which the amount of Contributions is calculated for the highest paid journeyman under the Employer’s Contracts.
An Employee whose spouse is an Owner of the Employee's Employer and who performs Covered Employment is not eligible unless the Employer makes Contributions on the Minimum Hours or the number of hours actually worked in Covered Employment, whichever is greater.
the Employer makes Contributions for the Minimum Hours or the number of hours he actually works in Covered Employment, whichever is greater.
The Trustees may grant exemptions for payment of Contributions for an Owner if the following conditions are satisfied. Exemptions may be granted with respect to a business entity (whether a corporation, sole proprietorship, partnership or other form of organization) or a combination of business entities that are owned and/or controlled by an Owner or a member of his immediate family.
An exemption, if granted, shall apply only to the Owner(s) who is/are the subject of an application.
The Owner must be a common law employee of an Employer for whom the exemption is granted, not an independent contractor or subcontractor.
The Owner must work with the tools on a regular daily basis.
The Owner or a member of his immediate family must be the chief operating officer of the company.
Administrator all relevant information that the Administrator shall require to determine whether an exemption shall remain in force.
The exemption from the requirement that Contributions be paid for an Owner shall not be effective until approved, in writing, by SASMI.
Notwithstanding any other provision set forth in the Plan, an exemption from the requirement that an Owner make Contributions to SASMI shall be effective for a period of no less than twelve (12) months. The Employer or Owner shall be responsible for submitting a request in writing, for removal of the exemption no sooner than 30 days prior to the date the Employer or Owner wish to again make contributions to SASMI on the Employee’s behalf.
The Supplemental Unemployment Benefits, Underemployment Benefits and Welfare Benefits for the Employee do not exceed the Contributions paid by the Employer for the Employee’s work.
vested nor guaranteed in any way.
Trustee Changes. The Trustees may, in their discretion, increase or decrease the Group Hours and other eligibility requirements, reduce the duration of Benefits or reduce the amount of Benefits, or waive eligibility or qualification restrictions in special circumstances, as the Trustees, in their discretion, deem consistent with the financial and actuarial integrity of SASMI. This discretion extends to reducing benefits for those who are unemployed and receiving benefits as well as to future eligibility for payment.
200% of Contributions. In addition and notwithstanding this or any other rule set forth in the Plan, an Employee who receives Benefits that exceed two times the total amount of Contributions (excluding any Contributions to HCRA Plan B) paid for his work shall not be eligible to receive additional Benefits, except as provided by the Trustees.
Unless otherwise provided by the Trustees, the rule in this subsection (b) shall not prevent payment of Benefits in the following circumstances.
An Employee shall not lose eligibility unless he or she has exhausted at least one cycle of eligibility, but must re-establish or recycle eligibility to continue to receive Benefits.
An Employee who has received less than $20,000.00 in previous Benefits shall not lose eligibility under this subsection (b).
An Employee with an outstanding Welfare Benefit balance of less than 380 multiplied by his Average Hourly Wage will remain eligible for Welfare Benefits only up to 380 hours, provided that the Employee has received less than $50,000.00 in Benefits.
if a participant had $140,000 in Contributions then he or she would not be eligible for benefits after a payment resulting in at least $140,000 in benefits.
An Employee may submit a written appeal seeking restoration of his eligibility for Benefits.
In determining the appeal, the Trustees may consider factors such as the availability of work opportunities to the Employee, the efforts of the Employee to seek and obtain employment in the industry and any other relevant factors or criteria, including conduct by the Employee that impact on his ability to obtain employment.
The Trustees shall have the sole and complete discretion in granting or denying such appeals and may, in its discretion, establish limitations on, or rules that will govern, the receipt of future Benefits by the Employee.
Employee shall cease to be eligible for Supplemental Unemployment Benefits, Underemployment Benefits and Welfare Benefits in the following circumstances.
Four (4) Paid Periods. An Employee has received Supplemental Unemployment Benefits, Underemployment Benefits or Welfare Benefits for any four (4) Stabilization Periods, without recycling or re-establishing eligibility, regardless of the period of time in which such four (4) Stabilization Periods occur.
18-Month Lapse in Contributions. No Contributions are required and made for work as an Employee for a period of eighteen (18) consecutive months, except as set forth in Article II, Section 4. The Plan may disregard amounts paid for minimal hours or work to continue eligibility. The Employee shall be required to reestablish eligibility under Article II, Sections 2 and 3.
SECTION 1. QUALIFICATION. An Employee qualifies for benefits under this Article for a Stabilization Period for which all of the following conditions are met.
The Employee is involuntarily unemployed during the applicable Stabilization Period.
The Employee was available for and sought suitable work in the Sheet Metal Industry in his Home Local Union at all times during such Stabilization Period and until receipt of payment.
The Employee did not refuse an offer or opportunity of suitable work or work in the Sheet Metal Industry on referral from his Home Local Union during the Stabilization Period.
The Employee demonstrated a willingness to travel reasonable distances on referral from his Home Local Union to secure suitable work in the Sheet Metal Industry.
The Employee was involuntarily unable to work the number of Group Hours applicable to his Home Local Union during such Stabilization Period, other than by reason of Temporary Disability for the entire Stabilization Period.
The Employee has received a State System unemployment check for the Stabilization Period or would have been eligible for such benefits but for a waiting period, exhaustion of benefits or insufficient wage credits under the State System.
The Employee submits an application in accordance with procedures established by the Trustees.
The Employee is eligible for Benefits under Article II and has not lost eligibility under Article II, Sections 6 or 7, and does not terminate participation nor lose qualification for Benefits under Article X at any time during such Stabilization Period or before receipt of payment.
SECTION 2. AMOUNT OF BENEFIT. The benefit payable under this Article shall be calculated in accordance with (a) and (b) below, but shall not exceed the maximum set out in (c) below.
The basic benefit equals the Average Hourly Wage on which Contributions were remitted in the Employee’s Home Local multiplied by the Group Hours for the Employee.
The basic benefit will be reduced by Industry Hours for the Stabilization Period and the amount of all Welfare Benefits paid on behalf of such Employee (for Stabilization Period 1991-A and later Stabilization Periods) that have not yet been deducted from such Employee's Benefits.
The maximum benefit is the lesser of one hundred ninety (190) times the Average Hourly Wage or the amount of the Employee’s average earnings used in computing his State System benefits.
The Employee has been unemployed for a period of 60 consecutive days, within the Stabilization Period.
The unemployment of the Employee is confirmed by the Employee’s Home Local Union business manager or agent or other appropriate person, including a State System, as the Administrator or Trustees may determine.
The Employee is eligible for Benefits under Article II and has not lost eligibility under Article II, Sections 6 or 7, and has not forfeited eligibility or qualification for Benefits under Article X before receipt of payment.
The Employee has registered at and has reported to an employment office maintained by a State System.
The Employee submits an application for advance payment in accordance with procedures established by the Trustees.
The amount of the advance cannot exceed ninety–five (95) times the Average Hourly Wage of the Employee or, in the discretion of the Administrator, a higher amount not in excess of 190 times the Average Hourly Wage. If the Employee has outstanding Welfare Benefits, the Employee will not be entitled to advance payment of benefits.
An Employee who receives an advance payment of supplemental unemployment benefits in a Stabilization Period will be deemed to have applied for and received an Underemployment Benefit for that Stabilization Period. An Employee who has received an advance payment of supplemental unemployment benefits in a Stabilization Period in an amount greater than the amount that is ultimately payable as an Underemployment Benefit in that Stabilization Period will be deemed to have applied for and received an Underemployment Benefit for a later Stabilization Period(s) and such excess payment shall be deducted from future Benefit payments until it is reimbursed to SASMI.
Employee shall cease to be eligible for supplemental unemployment benefits and forfeit any Benefits which would otherwise have been payable upon a loss of eligibility, termination of participation or loss of qualification as and to the extent provided in Articles II and X.
SECTION 1. QUALIFICATION REQUIREMENTS. An Employee qualifies for benefits under this Article for a Stabilization Period for which he satisfies the following conditions.
The Employee was involuntarily unable to work the number of Group Hours applicable to his Home Local Union during such Stabilization Period, including an absence due to non-occupational Temporary Disability for the entire Stabilization Period.
SECTION 2. AMOUNT OF BENEFIT. The benefit payable under this Article shall be calculated in accordance with (a), (b) and (c) below but shall not exceed the maximum set out in (d) below.
The basic benefit equals the Average Hourly Wage multiplied by the Group Hours for the Employee.
The basic benefit will be reduced by: (1) Industry Hours for the Stabilization Period; (2) the amount of all Health Benefits paid on behalf of such Employee (for Stabilization Period 1991-A and later Stabilization Periods) that have not yet been deducted from such Employee's Benefits and (3) the amount of Supplemental Unemployment Benefits paid for the Stabilization Period.
The Underemployment Benefit shall be adjusted as follows.
The Underemployment Benefit shall be reduced by one twenty-sixth (1/26th) for each week an Employee is not available for and/or seeking suitable work in the Sheet Metal Industry due to Disability, vacation (of more than two (2) weeks per year), strike or lockout, or other voluntary unemployment.
The Underemployment Benefit payable shall be reduced by one fifty- second (1/52) of the amount of Underemployment Benefit otherwise payable to the Employee for each week in the Stabilization Period during which the Employee was not available for and/or not seeking suitable work in the Sheet Metal Industry due to Temporary Disability.
The Underemployment Benefit payable to an Employee with a non- occupational Temporary Disability during the entire Stabilization Period is limited to half (50%) of the amount otherwise payable under the foregoing rules, excluding Temporary Disability adjustments.
The maximum benefit is one-hundred-ninety (190) times the Average Hourly Wage.
SECTION 3. LIMITATIONS ON UNDEREMPLOYMENT BENEFITS. An Employee shall cease to be eligible for Underemployment Benefits and forfeit any Benefits which would otherwise have been payable upon a loss of eligibility, termination of participation or loss of qualification as and to the extent provided in Articles II and IX.
SECTION 1. QUALIFICATION REQUIREMENTS. An Employee qualifies for Benefits under this Article in a Stabilization Period for which all of the following conditions are met.
An Employee is available for suitable work but does not work the number of hours necessary to be credited for the minimum contribution to continue his participation in the health plan in his Home Local Union or either has exhausted his hours or does not have sufficient hours in his credit or reserve bank to meet the participation requirements of the health plan of the Home Local Union.
The Employee’s lack of eligibility under the health plan of his Home Local Union is certified by the Employee's Local Union business manager or agent or other appropriate person as the Trustees may determine.
The Employee is not eligible for health coverage in the jurisdiction of any Local Union.
SECTION 2. AMOUNT OF BENEFIT. SASMI shall pay benefits under this Article in the following manner.
SASMI will pay the Home Local Union health plan in which the Employee is or was an Employee the difference between the monthly minimum of hours required to continue health insurance and related welfare benefit coverage for the Employee and his family and the number of hours credited to the Employee by the plan for the month or by reason of a credit or reserve bank.
Payment will be made based on a certification by the Home Local Union health plan that the Employee no longer has sufficient hours to maintain eligibility. The Home Local Union health plan will/may submit applications in accordance with procedures established by the Trustees or Administrator.
The payment under this Article cannot exceed the maximum amount payable as an Underemployment Benefit for the Stabilization Period.
No payment will be made unless the amount paid will provide health coverage for the Employee and/or his family. No payment will be made if an Employee has waived coverage under his Home Local Union health plan under applicable law, including the IRC. No Payment will be made in excess of an amount an employer would have to pay in order to maintain coverage.
SECTION 3. RECOVERY/COORDINATION OF BENEFITS. The amount of the payment under this Article will reduce any Supplemental Unemployment Benefit or Underemployment Benefit to which the Employee is or becomes entitled for the current or any future Stabilization Period.
SECTION 4. LIMITATIONS ON WELFARE BENEFITS. An Employee shall cease to be eligible for welfare benefits and forfeit any Benefits which would otherwise have been payable upon a loss of eligibility, termination of participation or loss of qualification as and to the extent provided in Articles II and X.
SECTION 1. QUALIFICATION REQUIREMENTS. An Employee qualifies for Benefits under this Article for a Stabilization Period for which all of the following conditions are met.
The Employee is from a Home Local Union which is party to a Contract, other than a Contract requiring contributions to HCRA B, on the date of the referral for travel to any area with a manpower shortage and a referral is made thru the SMART Job Bank prior to the travel. In certain situations, at the discretion of the Trustees, if a referral was made between Local Unions prior to the official SMART Job Bank posting, such referral and travel shall be eligible for benefits, but only if the referral was made within 15 days of the SMART Job Bank posing. For jobs between different Local Unions, the Employee must be referred to the area in which the manpower shortage exists through the SMART Job Bank.
The Employee is underemployed or threatened with Underemployment in his Home Local Union.
The Plan and Trustees determine that a manpower shortage exists in an area as the work force in the area is insufficient to provide the manpower necessary for present or immediate future job requirements.
The manpower shortage shall be certified to SASMI by a Local Union and an Employer in an area participating in SASMI or a Local Fund, a Local Union and an Employer within a single Local Union's territorial jurisdiction or a Local Union or the International Union and an Employer within the Local Union's jurisdiction which are party to an collective bargaining agreement which is not a Contract.
A Contract or a Supplemental Collective Bargaining Agreement/ Provisional Participation Agreement has been executed for the area of work.
job, whichever is shorter. If travel is less than one thousand (1,000) miles, the Employee must only complete thirty (30) working days within a period of forty-two (42) consecutive calendar days or the duration of the job, whichever is shorter. If travel is at least ninety (90) miles one-way from the Employee's home but within the jurisdiction of his Home Local Union, the Employee must only complete ten (10) working days within fourteen (14) consecutive calendar days. No benefits are payable for travel which is less than ninety (90) miles one-way.
The Employer in the area in which the manpower shortage exists guarantees, in advance, that each Employee approved for benefits under this Article who travels to the work area will be offered employment and paid wages, unless discharged for good cause, for at least sixty (60) working days within a period of eighty-four (84) consecutive calendar days. If travel is less than one thousand (1,000) miles, the Employer must only guarantee thirty (30) working days within a period of forty-two (42) consecutive calendar days. If travel is at least one hundred (100) miles one-way from the Employee's home but is within the jurisdiction of his Home Local Union, the Employer must only guarantee ten (10) working days within fourteen (14) consecutive calendar days. If traveling between a SASMI Contract and a non SASMI Contract the distance required needs to be greater than two-hundred (200) or more miles, one way, and outside his Home Local Union.
The Employee's Home Local Union and the Local Union or related health funds to which the Employee is traveling have both executed and each is currently a party to the National Reciprocal Health and Welfare Agreement for funds affiliated with the Local Union and International Union.
SECTION 2. AMOUNT OF BENEFIT. The benefit under this Article is the applicable amount under subsection (a) or (b) but not in excess of the limitations in subsections (c) through (f).
SASMI will pay the mileage rate under subsection (b) plus the per diem rate of $75/day up to a maximum of $1,125 for related living expenses or reasonable travel expenses incurred for any one round trip job within or outside of the Employee's Home Local Union.
An Employee who travels to the jurisdiction of another Local Union that participates in SASMI (excluding a Local Union that participates in HCRA B), without a thirty (30) or sixty (60)-day guarantee of employment, who actually works for the minimum period required under Section 1(f) of this Article and provides a layoff slip may receive payment of return mileage.
The mileage rate is the allowable rate for mileage for non-taxable reimbursement of travel expenses established from time to time under the IRC.
The total Travel Benefit may not exceed one thousand one hundred twenty five dollars ($1,125.00) for travel after 2013 or, if lower, the allowable IRS per diem amount without accounting for expenses for the area in which the Employee works or a lower limit under the Plan in effect before 2014.
The Travel Benefit will be reduced or eliminated where a contractor pays travel and/or living expenses, directly or indirectly, to employees.
SECTION 3. LIMITATIONS ON TRAVEL BENEFITS. An Employee shall cease to be eligible for travel benefits and forfeit any Benefits which would otherwise have been payable upon a loss of eligibility, termination of participation or loss of qualification as and to the extent provided in Articles II and X.
SECTION 1. QUALIFICATION REQUIREMENTS. An Employee qualifies for benefits under this Article if all of the following conditions are met.
The Employee is eligible for Supplemental Unemployment Benefits or Underemployment Benefits on or after July 1, 1992.
The Employee has at least two (2) years of Future Service Credit before 2010.
The Employee has a Severance from work in the Sheet Metal Industry on or after July 1, 1992.
The Employee is eligible for Benefits and does not forfeit his eligibility nor his qualification for Benefits under the Plan as in effect on or before December 31, 2009, before receipt of payment other than by reason of Severance.
An application is filed in accordance with procedures established by the Trustees.
multiplied by (c) the product of which is reduced by (d).
The Employee's years of Past Service Credit are multiplied by one percent (1%). The years of Past Service Credit cannot exceed the lesser of twenty-three (23) years or twenty-five (25) less the years of Future Service Credit.
The total Contributions actually paid to the Plan, as limited by Section 4 below, for work by the Employee shall be determined.
The basic amount as determined in paragraph (c) shall be reduced by subtracting the total amount of all Benefits received under this and any prior Plan.
The Severance benefit cannot exceed twice the Gross Earnings (as defined in the Plan in effect on or before December 31, 2009) of the Employee from Employers in the calendar year before termination of service with the Employers.
The Severance benefit shall be paid in a lump sum upon application after Severance and within twenty-four (24) months of termination of work with the Employers.
Any Severance Benefit paid to an Employee who returned to work prior to December 31, 2009, but not after January 1, 2010, in the Sheet Metal Industry shall be treated as an advance payment of Benefits. No Benefits will be paid to the Employee until the Severance Benefit payment has been deducted from future Benefits and reimbursed to SASMI.
SECTION 4. SEVERANCE TERMINATION. Notwithstanding anything else in this Article or Plan, the Severance Benefit will be frozen as of December 31, 2009, with no additional credit for Past Service Credit, Future Service Credit, or contributions after December 31, 2009. The Severance Benefit will be paid as and when provided under the terms of the existing plan, which has not been materially modified within the meaning of IRC Section 409A and the final Treasury Department regulations thereunder. It is the specific intent of this provision to eliminate the accrual of any Severance Benefit after December 31, 2009 that could be subject to IRC Section 409A. This Article and these Rules and Regulations shall be interpreted and applied accordingly.
SECTION 5. DEATH OF EMPLOYEE.
SASMI designation of beneficiary card filed with the Employee's Local Union. An Employee may change his designation of beneficiary from time to time. All beneficiary designations shall be made in the form and manner required by the Trustees who shall be the sole judges of the validity thereof.
If none of the persons enumerated in the foregoing listing of heirs survive the Employee, then the death benefit will be paid to the Employee’s estate.
In the event a deceased Employee would have qualified for the payment of a Severance Benefit but had not submitted an application and died within the time for application, an application may be filed by his beneficiary. Any benefit which is payable shall be paid to the designated beneficiary of the deceased Employee in accordance with the provisions of this section.
Employee shall cease to be an Employee as defined by this Plan and/or will not be eligible for Severance Benefits which would otherwise have been payable under the circumstances provided in the Plan as of December 31, 2009, which is incorporated by reference.
SECTION 1. QUALIFICATION. An Employee qualifies for Benefits under this Article if all of the following conditions are met.
The Employee is eligible for Active Benefits on or after January 1, 2010.
The Employee has obtained 5 years of Future Service Credit with a minimum or one (1) hour of paid Contributions after January 1, 2010. Eligible Active Employees that were unable to obtain 5 years of Future Service Credit due to death between January 1, 2010 and December 31, 2014 shall be deemed to have had the minimum required amount of Future Service to qualify if the Employee had at least five (5) years of Future Service Credit before 2010.
The Employee is eligible for Benefits under Article II and did not terminate participation nor lose qualification for Benefits under Article X at any time prior to death.
The Employee has not received Active Benefits exceeding the Contributions paid for his work.
The Employee has not received a Vacation Benefit.
Death occurs after January 1, 2010.
An application is filed within one (1) year of the Employee’s death and in accordance with procedures established by the Trustees.
SECTION 2. AMOUNT OF BENEFIT. The benefit payable under this Article shall be determined by the Employee’s years of Future Service Credit, as listed in the following chart. The benefit is only payable as listed below.
While committing an assault or felony.
SECTION 1. BENEFIT ADJUSTMENTS. Notwithstanding anything to the contrary in these Rules and Regulations, the Benefits payable to an Employee of a Production or Industrial Employer shall be adjusted and paid as provided in this Article. To the extent this Article IX does not specify eligibility or other requirements the provisions set out elsewhere in these Rules and Regulations apply.
The separate schedule of benefits for Employees of Production or Industrial Employers in the SASMI Production or Industrial Rules and Regulations is terminated as of December 31, 2013 and the provisions herein shall apply thereafter.
SECTION 2. INITIAL ELIGIBILITY. The initial eligibility of an Employee of a Production and Industrial Employer commences upon the completion of 600 Hours within any twelve (12) consecutive months, 1,000 Hours within any twenty-four (24) consecutive months, or 1,400 Hours within any period of time. Such initial eligibility shall entitle an otherwise qualified Employee to the payment of Benefits provided he meets all other requirements for such benefits.
under Article III cannot exceed ninety-five (95) times the Average Hourly Wage for eligibility based on work with and Contributions by a Production and Industrial Employer.
SECTION 4. UNDEREMPLOYMENT BENEFITS. The maximum benefit under Article IV cannot exceed ninety-five (95) times the Average Hourly Wage for eligibility based on work with and Contributions by a Production and Industrial Employer.
SECTION 5. WELFARE BENEFITS. The maximum benefit under Article V cannot exceed ninety-five (95) times the Average Hourly Wage for eligibility based on work and Contributions by a Production and Industrial Employer and must be paid only to a health plan maintained by the Employee’s Production and Industrial Employer.
Notwithstanding the prior Production & Industrial Rules and Regulations, no payment shall be made to reimburse medical premiums or payments for health benefit coverage by an Employee after 2013.
SECTION 6. TRAVEL BENEFITS. There are no Travel Benefits under Article VI for Employees with eligibility based on work with and Contributions by a Production and Industrial Employer.
SECTION 7. SEVERANCE BENEFITS. An Employee shall only be eligible for Severance Benefits under Article VII based on work with and Contributions to SASMI by a Production or Industrial Employer as provided in the Production & Industrial Rules and Regulations as of December 31, 2009.
SECTION 8. DISABILITY BENEFIT. The disability benefit under the separate schedule of benefits for employees of Production or Industrial Employers in the SASMI Production or Industrial Rules and Regulations is terminated as of December 31, 2013.
SECTION 9. DEATH BENEFIT. The maximum benefit under this Article IX, Section 9, cannot exceed $25,000. The benefit shall be determined by the Employee’s years of Future Service Credit, as listed in the following chart.
SECTION 1. PARTIAL LOSS OF BENEFITS. Notwithstanding any other provision of the Plan, an Employee is disqualified from payment and forfeits all Supplemental Unemployment Benefits, Underemployment Benefits, Welfare Benefits and Travel Benefits which would otherwise have been payable for a Stabilization Period under the following circumstances.
result in loss of qualification for Travel Benefits or Welfare Benefits.
the Trustees determine that such advance training is required.
Refused Work. An Employee who refuses, without sufficient cause, an offer or opportunity of suitable work or work referral from his Home Local Union during any Stabilization Period is disqualified.
Disability. Except as provided in Article IV, Section 2(c)(3) and related provisions, an Employee with a Disability for an entire Stabilization Period is disqualified.
Drug Testing. An Employee who fails, neglects or refuses to pass job-site drug testing requirements is disqualified from Supplemental Unemployment Benefits, Underemployment Benefits, and Travel Benefits, unless the Employee is enrolled in a bona fide employee assistance program.
SECTION 2. LOSS OF ALL BENEFITS. Notwithstanding any other provision of the Plan, an Employee is disqualified from payment and forfeits all Benefits which would otherwise have been payable under the following circumstances. An Employee who loses Benefits under this section shall cease to be an Employee in the Plan and must re-establish initial eligibility under Article II, Section 1.
Individual Termination – Current Benefits. Eligibility for Benefits that would otherwise have been payable (other than a Severance or Death Benefit) unless allowed by Article II, Section 4, shall be lost immediately in the following circumstances.
An Employee permanently ceases to be employed in the Sheet Metal Industry.
An Employee accepts permanent employment outside the Sheet Metal Industry, whether or not he remains in his Home Local Union.
An Employee becomes a partner or the sole proprietor of a business in the Sheet Metal Industry.
An Employee becomes an Owner or Relative of an Owner of a business in the Sheet Metal Industry and does not satisfy the requirements of Article II, Section 5.
Individual Termination – All Benefits. Eligibility for Benefits that would otherwise have been payable and all Past Service Credit and Future Service Credit shall be lost immediately in the following circumstances.
An Employee accepts any employment in the Sheet Metal Industry from an employer who is not party to a collective bargaining agreement with the International Union or a Local Union.
An Employee transfers to a Local Union with no Contracts or one with a Contract requiring contributions to HCRA B.
Local Union Termination. Eligibility for Benefits that would otherwise have been payable and all Past Service Credit and Future Service Credit shall be lost immediately when the Employee's Home Local Union takes an action that terminates or will at some future date terminate the provisions of the Local Union's Contracts. This provision shall not apply to an Employee who transfers to a Local Union with a Contract or files an application for a Severance Benefit with SASMI before the Employee’s Home Local Union takes action that terminates or will terminate at some future date the provisions of the Local Union’s Contracts. The application shall be processed and, if a Severance Benefit would otherwise be made, paid thereon as if the action of the Employee's Home Local Union had not occurred. For purposes of this provision, a collective bargaining agreement requiring contributions to HCRA B is not a Contract.
Offset. Any Benefits due an Owner or spouse of an Owner who fails to pay Contributions or other amounts to SASMI shall be reduced by the amount not paid and interest on that amount under Section 502(g) of ERISA. The same rule shall apply to any other Employee who is personally responsible for an Employer’s failure to make payment to SASMI as required by Article XIII Section 3(c). The procedure set out in this section relates to the calculation of benefits, it is not a denial of benefits. This procedure may change the amount of an obligation, but it does not eliminate the existence of the Plan’s obligation to pay the benefit as calculated, even if the calculated amount is $0. The implementation and use of this procedure cannot be waived, released, discharged or otherwise modified in the calculation of any person's benefits without a specific reference to this plan section and to the plan benefit(s) to which the waiver, release, discharge, etc is meant to apply.
all Hours and Contributions with the former Employer after the former Employer’s termination date shall be disregarded.
Filing of Applications. An application for a Benefit shall be available from SASMI or other persons authorized by the Trustees and shall be filed with the SASMI office.
Application Information. An application for a Benefit shall be made in writing and shall include information deemed necessary by the Trustees such as wages, source and amount thereof, and such other information as the Trustees may reasonably require in order to determine whether the Employee or other claimant is entitled to a Benefit.
Fraudulent or Deceptive Statements. If the Trustees determine that an application for benefits has been intentionally falsified by an Employee, for the purpose of attempting to receive benefits not otherwise payable, the result will be disqualification from any Benefits payable and future Benefits for a period of one (1) year. If the falsification is committed by a representative of an Employee or other person, the person shall be subject to any available remedy under applicable law.
OR UNDEREMPLOYMENT BENEFIT. An application for a Supplemental Unemployment Benefit or Underemployment Benefit shall be made in writing in the form established from time to time by the Administrator, as approved and authorized by the Trustees. The application shall be postmarked and mailed to SASMI no later than April 1st or the first business day thereafter for Stabilization Period B and no later than October 1st or the first business day thereafter for Stabilization Period A.
UNEMPLOYMENT BENEFIT. Application for advance payment of a Supplemental Unemployment Benefit shall be made in writing in the form established from time to time by the Administrator, as approved and authorized by the Trustees. The application shall be filed after the first month of the Stabilization Period for which the application is made. A separate application shall be filed for each monthly payment.
SECTION 4. APPLICATION FOR WELFARE BENEFITS. No application for Welfare Benefits is required from an Employee. The health plan of the Employee’s Home Local Union shall apply for payment by certifying that the Employee is not eligible for coverage under uniform plan rules applicable to all Employees (with or without SASMI coverage) and billing SASMI for payment in writing in the form established from time to time by the Administrator, as approved and authorized by the Trustees. The application shall be postmarked and mailed to SASMI by the Home Local Union health plan within ninety (90) calendar days after the end of the period for which the Welfare Benefit is to be paid.
SECTION 5. APPLICATION FOR TRAVEL BENEFITS. Application for any of the Travel Benefits shall be made in writing in the form established from time to time by the Administrator, as approved and authorized by the Trustees. Such application shall be filed with SASMI by the Employee prior to traveling.
SECTION 6. APPLICATION FOR SEVERANCE BENEFITS. Application for a Severance Benefit shall be made in writing in the form established from time to time by the Administrator, as approved and authorized by the Trustees. The application shall be filed with SASMI by the Employee no later than twenty-three (23) months after the Employee terminates service with the Employers.
SECTION 7. APPLICATION FOR DEATH BENEFITS. Application for Death Benefits shall be made in writing in the form established from time to time by the Administrator, as approved and authorized by the Trustees. The application shall be filed with SASMI by the Employee’s surviving spouse or dependent child(ren) no later than twelve months after death.
SECTION 8. APPLICATION PROCESSING BY TRUSTEES. An application or other claim for Benefits is complete when the Employee or other claimant has furnished the information required. SASMI then shall determine whether an Employee is entitled to such Benefit and, if so entitled, shall arrange for the payment of the Benefit as soon as practicable. SASMI and the Claims Committee may expedite handling of a claim and extend the deadline for a request for review of a claim as necessary to maintain a reasonable claims procedure under ERISA and applicable regulations.
SECTION 9. NOTIFICATION TO CLAIMANT OF DECISION. If a Benefit application is granted, the Administrator shall make payment to the claimant in accordance with the Plan. If a claim (as defined under Section 502 of ERISA) is wholly or partially denied, the claimant shall be so notified within ninety (90) days after receipt of the application or, in special circumstances and with notice to the claimant within 90 days, up to 180 days. A denial shall include the specific reason for the denial, specific references to the Plan provisions on which the denial is based, a description of any additional material or information necessary for the claimant to complete the claim, including an explanation of why such material is necessary, and an explanation of the Plan's claims review procedure.
SECTION 10. CLAIMS COMMITTEE. The Trustees may appoint a Claims Committee, consisting of two or more persons with equal representation of Employer and Union Trustees, to carry out their functions with respect to the claims and review procedure specified in this Article. The Claims Committee shall have scheduled quarterly meetings to consider requests for review.
documents and may submit issues and comments to the Trustees in writing. The claimant may have representation in connection with this review procedure.
SECTION 12. DECISION ON REVIEW. Upon receipt of a request for review, the Trustees or the Claims Committee shall render a decision at the next scheduled meeting of the Trustees or the Claims Committee scheduled at least 30 days after receipt of the request for review or as soon as possible thereafter after receipt of the request for review, or, in special circumstances and with notice to the claimant before the initial deadline, the next scheduled meeting of the Trustees or the Claims Committee. The decision of the Trustees or the Claims Committee shall be in writing and shall include the specific reason(s) for the decision and specific reference to the Plan provisions on which the decision is based. Requests for review shall be considered at least once during each quarter of each calendar year by the Trustees or the Claims Committee.
SECTION 13. RECORDS. SASMI shall maintain a record of all applications for Benefits, requests for review and responses thereto, as required by ERISA.
A claimant has a duty to present a claim for payment to SASMI before other legal action. To the fullest extent allowed by applicable law, no administrative proceedings, arbitration, lawsuit or other legal action on a claim against SASMI or its fiduciaries without filing of an application for Benefits or other claim for payment with SASMI and timely completion of the claims procedure in this Article.
the last date for a timely response by the Plan to a request for review or other request under ERISA and applicable regulations.
The Administrator or legal counsel to the Trustees may agree to extend any time limits for review or other proceedings in writing to a claimant.
If the Trustees overpay an Employee or other person, the recipient shall be required to make repayment to SASMI upon receiving written notice of such obligation from the Trustees.
If the recipient shall fail to return such amount, the amount of overpayment and interest may be deducted from any future Benefits or payments with respect to an Employee.
The Trustees additionally may take legal action to recover from the Employee or other recipient of an overpayment. In any such action, the Employee or other recipient of an overpayment shall be obligated to pay reasonable attorney's fees and any other fees or costs related to recovery of the overpayment and interest on the overpayment.
any amounts required to be withheld or deducted from wages or benefits by the Employers.
The amount withheld or deducted shall, when paid to the appropriate recipient, discharge and release the obligation of the Plan to the Employee for any Benefit.
an Employer's contribution level and the number of Hours to be credited to an Employee.
SECTION 2. NONALIENATION OF BENEFITS. No attempt to subject a Benefit or portion thereof to alienation, sale, transfer, assignment, pledge, attachment, garnishment, execution, or encumbrance of any kind shall be valid and enforceable. The Trustees may terminate the interest of an Employee in the Benefit or a portion thereof and apply the amount of such benefit or portion thereof to or for the benefit of such Employee's spouse, children, parents or other relatives or dependents or designated recipient as the Trustees may determine and any such application shall be a complete discharge of all liability with respect to such Benefits.
An employer will pay Contributions to the Plan or Trust, for allocation to the Plan as directed by the Trustees, as required by law, a Contract, or the Trust Agreement and pay interest, liquidated damages and costs of collection (including audit and attorney fees) as required by the Contract, Trust Agreement or applicable law.
All Contributions are, and shall be considered as, Plan assets from the date on which the earnings on which the employer is obligated to pay contributions to Plan or Fund accrue, whether or not such contributions are collected or received by Plan or Fund, and shall be held by an employer in trust as a fiduciary for the Plan or Fund. No employer has any right, title, or interest to any sum payable by the employer to Plan or Fund, but not yet paid to Plan or Fund. Title to all Contributions paid and/or due and owing to Plan or Fund shall be vested in the Trustees.
other appropriate legal and equitable relief.
Nothing in this section shall be construed as a waiver or limitation on the rights or ability of the Plan, Trustees or Union to enforce an employer’s contribution obligation in any other type of proceeding.
The Trustees may refuse any monies tendered which they find inconsistent with the financial integrity or actuarial soundness of SASMI.
SECTION 4. CHOICE OF LAW. All questions pertaining to validity, construction and administration of the Plan shall be determined in accordance with ERISA and, where reference to state law is necessary or appropriate, the law of the District of Columbia.
Hybrid Entity. SASMI, which includes both the Active Plan and the Retiree Plan, is designated a “hybrid entity” as defined under 45 CFR §164.504. As such, the rules in subsections (b) to (n) below apply only with respect to the group health benefit operations of SASMI, directly or in relation to a Local Fund. The only benefit provided by the Active Plan that is related to heath benefits is the payment of Premiums for participants who do not work sufficient hours to maintain coverage in their Health Plans, which in itself is not a group health benefit.
Unauthorized Use or Disclosure. Protected Health Information will only be used or disclosed as permitted or required by SASMI documents or as required by law.
Subcontractors and Agents. The Trustees and SASMI will require each agent and subcontractor to whom they provide Protected Health Information to agree to written contractual provisions that the agent or subcontractor will be subject to the same restrictions and conditions that apply to SASMI with respect to Protected Health Information.
Permitted Purposes. Protected Health Information will not be used or disclosed for employment-related actions and decisions or in connection with any other benefit or employee benefit plan of the employers who contribute to SASMI.
Reporting. The Trustees and SASMI will report and record uses or disclosures of Protected Health Information that are inconsistent with those permitted by law of which they become aware.
Protected Health Information Availability. Protected Health Information will be made available to Employees at the SASMI office so that Employees can inspect and copy their own individual Protected Health Information.
Protected Health Information Correction. Participants or beneficiaries eligible for health benefits will be permitted to amend or correct Protected Health Information that is incorrect or incomplete and SASMI will incorporate any such amendments or corrections provided by the Plan.
Minimum Necessary Standard. The Trustees and SASMI will use their best efforts to request only the minimum necessary type and amount of Protected Health Information needed to carry out the functions for which the information is requested.
Adequate separation. The Trustees will ensure that adequate separation exists between SASMI employees who perform functions related to its health care component and other employees of SASMI so that Protected Health Information will be used only for any group health benefit functions performed by SASMI. For purposes of establishing adequate separation, the Trustees will certify the employees or classes of employees that will have access to Protected Health Information for administrative purposes.
Non-compliance. Improper uses or disclosures of Protected Health Information may be reported to the privacy official of SASMI or the privacy official’s designee for handling HIPAA violations.
Non-compliance by Business Associate. The Trustees and SASMI will not be liable for a breach of the HIPAA Privacy requirements by a business associate under HIPAA, except as required by law.
Administrative, Physical, and Technical Safeguards. Implementing administrative, physical, and technical safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of Electronic Protected Health Information that SASMI creates, receives, maintains, or transmits on behalf of the plan.
Security of Adequate Separation. Ensuring that the “adequate separation” between a group health plan and other offices or plans of the union or employers described in the “Privacy of Protected Health Information” section is supported by reasonable and appropriate security measures.
Subcontractors and Agents. Ensuring that any agent, including a subcontractor, to whom it provides Electronic Protected Health Information agrees to implement reasonable and appropriate security measures to protect such information.
Reporting. Reporting any security incident of it becomes aware.
The provisions in Sections (a) through (d) above do not apply to Electronic Protected Health Information that a plan sponsor receives; (1) pursuant to 45 C.F.R. §164.504(f)(1)(ii) or (iii), or, (2) through a valid authorization in accordance with 45 C.F.R. §164.508.
The HIPAA security regulations, 45 C.F.R. Parts 160, 162, and 164, are incorporated herein by reference. Unless defined otherwise, all capitalized terms herein have the definition given to them by the Security Regulations. If any other provision(s) of the Plan conflicts with this Section, this Section shall control.
SECTION 1. AMENDMENT. No Employee or person claiming through an Employee shall have any right, title or interest in SASMI, its assets or Benefits until the Employee is qualified and receives payment. The Benefits under the Plan are not vested and may be amended or modified by the Trustees at any time before payment. No amendment or modification may cause a reversion of any Plan assets to the Employers nor permit any Plan assets to be used for or diverted to any purpose other than the exclusive benefit of the Employees and their beneficiaries and payment of administrative expenses.
shall any money or assets remaining in the Plan be returned to or inure to the benefit of an Employer, a Local Union or the International Union.
may, in their sole discretion, enter reciprocal agreements with other employee benefit plans or Local Unions which shall form part of this Plan or accept contributions from Employers at non- standard rates. Absent other direction of the Trustees, any and all Benefits under the Plan will be pro-rated and adjusted based on the amount of such contributions in relation to the standard SASMI contribution rate for a building trades journeyman for work covered by an alternative contribution.
the employer fails to pay contributions at the minimum contribution rate as the Trustees may impose in order to preserve the actuarial soundness of SASMI and adequately to fund benefits provided under the Plan.
SECTION 5. SEVERABILITY. Should any provision in the Plan presently or hereafter in effect be deemed or held to be invalid under the provisions of ERISA, other applicable state or federal law or to impair SASMI’s status as an organization exempt from federal income tax, such invalidity or impairment shall not adversely affect the other provisions of the Plan. The Plan shall be construed and shall be automatically amended (including creation of separate plans) to eliminate the invalidity or impairment, with such retroactive effect as is necessary or appropriate. If the invalidity or impairment shall make impossible or impractical the functioning of the Plan, the Plan shall terminate unless the Trustees shall approve a different course of action.
We have signed this document to evidence and memorialize our prior and current resolutions on, 2017, effective January 1, 2017.