Totals of bank balances on the last day of each month during the current year (If more space is needed, attach additional sheets) 1. Give the names and addresses of the participating labor organizations for whose members the fund is operated: International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, Kansas City 11, Kans. 2. Give the names and addresses of associated or affiliated funds: None. (See note 7.) 3. How many members were in the fund at the end of the current year? 29,652. 4. Are any members of the fund employed outside of New York State? Yes. If so, please give the following information: Number of members employed in New York: 100. Number of members employed outside of New York: 29,552. 5. State largest number of contributing employers during the current fiscal year: 734. 6. (a) On what dates during the past year did the board of trustees (or similar body) meet? October 11-12, 1955; December 12, 13, 14, 1955; February 13, 1956; March 6, 7, 8, 1956; June 12, 13, 14, 1956; September 5, 6, 7, 1956. (b) Are minutes kept of such meetings? Yes. 7. Have any amendments or other changes been made during the current fiscal year in (a) the types and amounts of benefits provided by the fund, (b) the terms of trust indentures, (c) pertinent provisions of collective bargaining agreements, and (d) any descriptive booklets or other similar written material given or made available to employee-members? Yes. If so, have copies of all such amendments or other changes been filed with this Department? No. (If not, attach copies to this annual statement.) See note 4 in which the changes in the plan of insurance and eligibility requirements are described. 8. Are the members provided with a written description of the benefits and eligibility requirements? Yes. 9. If benefits are covered by insurance contracts, were the rates and conditions in such contracts subject to competitive bidding? Yes. 10. Is a health center maintained by the fund? No. 11. How often are the fund accounts audited by a certified public accountant? Once a year at the end of the fiscal year. 12. Explain how the annual report, filed concurrently with this annual statement, will be made available to employee-members, contributing employers, and participating labor organizations: The annual report is put in booklet form and distributed to all contributing employers by direct mail and all employees participating through the local unions. A copy of the booklet for the fiscal year ended September 30, 1955, is attached. The current booklet is in process and will be forwarded when available. 13. Were any loans made during the year to trustees, officers, administrators or employees? No. If so, list each such person, the date and amount of each loan made during the year, and the balance unpaid at the end of the current year: N. A. 14. Does the fund hold investments in the securties or other properties of any of its contributing employers or participating labor organizations? No. If so, specify: N. A. 15. (a) How many signatures are required on fund checks? Two. (b) Is it required that a trustee designated by the union (or employees) and a trustee designated by the employers both sign fund checks? Yes. See Note 1. 16. Were any of the recipients of commission and allowances shown on Page 9 related through blood or marriage or associated in any business endeavor, profession or other occupation with any fund trustee, administrator, officer, or union official? Yes. If so, give details: Marsh & McLennan, Inc., is both administrator and insurance consultant, broker of record. 17. Were all stocks, bonds, and other invested assets, exhibited as assets herein in the actual possession and in the name of the fund? No. If not, explain fully All securities are held in the custodian account by the Continental Illinois Na tional Bank & Trust Co. 18. Were any of the stocks, bonds, or other assets of the fund loaned during the year covered by this statement? No. If so, explain fully. 19. Is the administrator of the fund also employed by a participating labo organization or a contributing employer? If so, in what capacity In view of the size of Marsh & McLennon, Inc., it might have acted as broker t some of the contributing employers in other, unrelated insurance matters. 20. Are any paid employees of the fund also employed by a participating labo organization or a contributing employer? None. If so, in what capacity? N. 21. Describe or explain the actuarial, statistical or other methods used in t computation of the reserves shown at lines 1, 2, and 3 of page 3: None. Trustees Members of board of individual trustees, pension board, committee, or other similar body Trustees of the fund, being duly sworn, each for himself deposes and says that this annual statement, together with the schedules, exhibits and explanations herein contained, annexed, or referred to, is a full and true statement of the condition and affairs of the fund according to the best of his information, knowledge, and belief. Subscribed and sworn to before me this day of 195_.. NOTE. If the trustees are composed of both employer and employee (or labor organization) representatives, the above affidavit must be signed by one from each group. Mr. HOUSE. How much time did it take to prepare this report? prepare. Mr. HOUSE. In terms of man-hours, you say about 60 hours? Mr. BLOMQUIST. I would say about 60 hours altogether, yes, sir. Mr. BLOMQUIST. Approximately $1,000. Mr. HOUSE. $1,000 for 60 hours? Mr. BLOMQUIST. Yes. Mr. HOUSE. Would you consider a $1,000 annual expense as an excessive expense in relation to the regulation, control, and supervision over a fund of $1.5 million a year? Mr. BLOMQUIST. Not of a fund of $1.5 million a year, no. I think in relation to a smaller fund, however, it might be. I would think that the preparation for a smaller fund probably would entail as much time as for a larger fund. Mr. HOUSE. There is some variation as the number of assets and items reported increases; is there not? For example, you would have a much less elaborate list of salaries and disbursements paid, would you not, in a smaller fund? Mr. BLOMQUIST. Not necessarily. As a matter of fact, it might be just the reverse, Mr. House. In this situation, we have not listed any salaries, simply because there are none. The fund is administered by Marsh & McLennan under a contract. Under a smaller welfare fund which was not administered by an organization such as ourselves, there would be salaries to be reported. Mr. HOUSE. Isn't this exhibit attached to the fund a list of officials of the fund who get both an allowance and a travel-expense item? Mr. BLOMQUIST. The item entitled "allowances" is really a per diem expense allowance for periods during which the board of trustees meet. Because this is a national fund, it is necessary for them to meet in different parts of the country. Actually, both of those items involve the expense of attending these meetings. It is simply reimbursement of expense incurred. Mr. HOUSE. In any event, an expense of $1,000 in relation to the $1.5 million is considerably less than one-tenth of 1 percent per year; is that right? Mr. BLOMQUIST. Yes. Mr. HOUSE. Are you familiar with the investigations carried out in the State of New York with relation to welfare and pension funds before the New York statute was adopted? Mr. BLOMQUIST. In a general sense, but not in specific cases. Mr. HOUSE. I suppose you know, then, the way in which the data for those investigations was gathered. Preliminary questions were submitted to all welfare funds and pension funds, and on the basis of the results which were analyzed by the insurance staff, particular funds were selected for more elaborate investigation. You are familiar with that? Mr. BLOMQUIST. Yes. Mr. HOUSE. Is it not a fair statement, then, that those questions were so devised as to elicit material which did give clues to abuses, and wastes of moneys, in welfare and pension funds? Mr. BLOMQUIST. I do not think I have any way of knowing the answer to that, Mr. House, because I do not know what the questions were and I do not know the basis on which the particular funds were selected for investigation. I do think this in connection with the investigation which was conducted by the Senate Subcommittee on Pension and Welfare Funds a couple of years ago, that there were certain funds which, I think, were suspected for one reason or another, and as a result of the study at close range of those funds by the field investigators of the committee, they proved there was no reason for them to be suspected. Mr. HOUSE. That there was no reason? Mr. BLOMQUIST. That is correct, that they were properly admin istered. Mr. HOUSE. You are familiar with the fact that abuses have occurred in different funds? Mr. BLOMQUIST. Most certainly. Mr. HOUSE. Can you give us examples of some of the abuses that you have come across? Mr. BLOMQUIST. Well, I probably am not a very good one to ask about that, for this reason: Funds in which the parties, the interested parties, intend to commit abuses, never get into our hands. Because of our reputation, the principals-and I have had this experiencethe principals who may have in mind abuse of the funds are not particularly, or not a bit, interested in our becoming involved in the situation. Mr. HOUSE. Are you familiar with abuses outside of funds that are directly handled by your firm? Mr. BLOMQUIST. Yes, certainly. Mr. HOUSE. Can you tell us about some of those? Mr. BLOMQUIST. Many of them have been well publicized. The Laundry Workers fund, which we are all, I think, quite familiar with, in which there are abuses in regard to commissions, is one example. Then there are, of course, a great many others. Mr. HOUSE. Do you agree that in some instances, abuses occur in the payment of excessively large salaries to fund officials and directors? Mr. BLOMQUIST. Yes, I do. Mr. HOUSE. And do you agree that in many instances abuses occur in the withdrawal of fund moneys by fund officials without even vouchering for them? Mr. BLOMQUIST. Well, I am not too sure what would constitute "in many instances," Mr. House. Mr. HOUSE. Let us say have there been some instances. Mr. BLOMQUIST. There have been some cases. That is in the record, I believe. Mr. HOUSE. Would not those abuses be disclosed by a proper, certified public accountant's examination and report? Mr. BLOMQUIST. I do not know that they would, necessarily. Mr. HOUSE. Would not salaries, for example, be disclosed in the kind of questionnaire required by the State of New York? Mr. BLOMQUIST. They would be disclosed in the kind of questionnaire, yes, sir, required by the State of New York. Mr. HOUSE. Would not all other expenses have to be itemized? Mr. BLOMQUIST. Yes, sir. They are required to be. That is true. Mr. HOUSE. Would instances of expense withdrawals without Voucher be indicated in that report? Mr. BLOMQUIST. Although I am not an accountant, I would imagine that they would be; yes. Mr. HOUSE. An accountant's report has to accompany your annual report to the State of New York? Mr. BLOMQUIST. No, it does not. I think that may be one of the weaknesses of that kind of reporting. There is no certification by a public accountant that the figures are true and correct? Mr. HOUSE. But that requirement is found in the Thompson bill, is it not, and the Frelinghuysen bill? Mr. BLOMQUIST. I understand it is; yes. Mr. HOUSE. The report to the State of New York must supply, must it not, the names of all people who share in the commission? Mr. BLOMQUIST. Yes. Mr. HOUSE. Wouldn't that give clues to other types of abuse? Mr. HOUSE. You have read, I am sure, the Thompson and the Frelinghuysen bills? Mr. BLOMQUIST. In condensation, yes, but not entirely. |