DOL Sues Retirement Plan Trustees to Recover Nearly $900,000 in Pension Assets
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Friday, August 14, 2009 |
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The
U.S. Department of Labor has sued defunct Vinyl-Mark Products Inc. of
Hueytown, Ala., and the company's pension and profit sharing plan
trustees for allegedly misusing $898,259.69 in plan assets to pay the
operating expenses of the company.
The lawsuit alleges that the
company, formerly known as First Alabama Supply Co. Inc. and trustees
Willard D. Bailey Jr. and Jessie Mae Bailey violated the Employee
Retirement Income Security Act (ERISA). The trustees allegedly made a
series of transfers from the plans to the operating accounts of the
company at various times between October 2004 and February 2007.
"The
department will not tolerate the misuse of workers' retirement savings
to subsidize corporate expenses," said Phyllis C. Borzi, assistant
secretary of the Labor Department's Employee Benefits Security
Administration (EBSA). "Our legal action is designed to ensure these
workers are made whole and prevent the trustees from misusing employee
benefit plan assets in the future."
The suit seeks a court order
to require that all defendants restore all losses incurred by the plans
and disgorge any profits or illegal gains, and to appoint an
independent fiduciary to oversee the plans. The department also asks
that the trustees be permanently barred from serving in a fiduciary
capacity to any plan governed by ERISA and that the trustees'
retirement accounts be offset to repay losses and lost opportunity
costs owed to the plans. Money offset will be re-distributed to the
accounts of the remaining participants covered by the plans.
The
company was a wholesale distributor of vinyl siding, accessories and
windows. It sponsored a defined benefit plan for 59 participants and a
profit sharing plan covering 29 participants. As of Dec. 31, 2005, the
plans held cumulative assets of $701,361.
Employers and workers
can reach the Atlanta Regional Office of the Labor Department's
Employee Benefits Security Administration at 404-302-3900 or toll-free
at 866-444-3272 for help with problems relating to retirement and
health benefits. In fiscal year 2008, EBSA achieved monetary results of
$1.2 billion related to the pension, 401(k), health and other benefits
for millions of American workers and their families.
Solis v. Vinyl-Mark Products Inc.
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