Compliance News | March 16, 2020

ERISA-governed Funds: Reimbursing Cancelled Travel?

Is it permissible for an ERISA-governed multiemployer welfare fund to reimburse trustees for unused travel expenses when cancellation occurred outside any applicable refund policy and was due to COVID-19?

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Regarding COVID-19 travel cancellations

Many plan trustees are finding they must cancel travel to previously scheduled events for which travel expenses, such as airfare, train fare, or hotel deposits have been paid.

These cancellations are related to the risks of COVID-19 and may occur because the entire event has been cancelled or because the event attendee is part of a high risk group for which travel/attendance of large group gatherings is not recommended. Trustees may find themselves unsuccessful when seeking refunds on these travel cancellations.

Trustees should consult with legal counsel

Trustees should consult with legal counsel and review their existing reimbursement policies. If the original event was a legitimate plan expense, such as attendance at an annual conference or trustee meeting, the trustee expense of nonrefundable travel charges due to COVID-19-related cancellations would seem to be a legitimate plan expense.

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.

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