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Release Date: 08/30/2002
Release Number: V-325
Contact Name: Sharon Morrissey
Phone Number: 202.693.8664
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Minneapolis, Minnesota - The U.S. Department of Labor has filed a lawsuit against the
fiduciary of the Double A Electric, Inc. SIMPLE IRA Plan of Alexandria,
Minnesota
for failing to forward employee withholdings to the IRA accounts of individual
participants. |
“This action demonstrates our commitment to protect the hard-earned
benefits of American workers," said Gregory Egan, director of the department’s
Kansas City Regional Office of the Pension and Welfare Benefits Administration,
which investigated the violations of the Employee Retirement Income Security Act
(ERISA). |
The department’s complaint, filed August 12 in federal district court in
Minneapolis, alleged that company president, Loren Koenen, who also served as
the plan’s fiduciary, failed to forward to the plan $9,997.50 in contributions
withheld from employees’ paychecks from January 2000 to November 2000, using
the money to benefit the company. The department is seeking payment of the
contributions plus interest. |
The company filed for Chapter 7 bankruptcy protection March 27, 2001 in the
U.S. Bankruptcy Court for the District of Minnesota in Fergus Falls, Minnesota.
The plan, which was adopted in February 1999, had 17 participants. The
plan has not been terminated. The department filed a proof of claim on December 17, 2001 in the federal bankruptcy court for $10,517 against the company,
which includes lost interest. |
Egan noted that employers with similar problems, who are not yet the subject
of an investigation by PWBA, may be eligible to participate in the
Department’s Voluntary Fiduciary Correction Program (VFCP).
Participation in the VFCP requires employers to make workers whole, but allows
them to avoid PWBA enforcement actions and civil penalties, as well as excise
taxes. |
“The VFCP gives plan sponsors a way to come into compliance with ERISA by
restoring workers’ benefits while avoiding an investigation by PWBA,” said
Egan. “It protects workers’ health and retirement benefits and allows us to
focus our resources on those who seek to avoid compliance.” For more
information about the VFCP see www.dol.gov/pwba. |
Employers and workers can contact the Kansas City Regional Office at
1.816.426.5131 or PWBA’s Toll-Free Employee & Employer Hotline number,
1.866.275.7922, for help with
problems relating to private-sector pension and health plans. |
(Chao v. Loren Koenen
Civil Action No. 02-CV-2899) |
U.S. Department of Labor
news releases are accessible on the Internet. The information in this news
release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing
your request. Call 202.693.7773 or TTY 202.693.7775. |