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Release Date: 03/20/2002
Release Number: 160
Contact Name: Sharon Morrissey
Phone Number: 202.693.8664
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Detroit, Michigan - The trustees and the former administrator of
the Detroit, Michigan-based Millwrights Local 1102 supplemental pension and
health plans agreed to restore $597,775 to the plans. National City Bank of
Cleveland, Ohio, was appointed as an independent fiduciary to manage certain
participant and non-participant mortgage loans, according to a settlement
reached on March 19 by the U.S. Department of Labor.
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Under the judgment, the trustees were ordered to resign their
positions with the plans. The court also ordered the pension plan to comply with
the requirements of the Employee Retirement Income Security Act (ERISA) in any
future lending or investment activity and gave National City Bank authority to
manage the participant and non-participant mortgage loan portfolio of the
pension plan. National City Bank exercised that authority and sold the
pension plan’s participant and non-participant mortgage loan portfolio for
$1,173,813.40.
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The judgment resolves a suit filed August 23, 2000 against
third-party administrator Automated Benefit Services, Inc. (ABS) and trustees
Walter R. Mabry, Jerry D. Moore, Ronald M. Krochmalny, Keith R. Scrutton,
Milford E. Woodbeck, Sr. and Roy Shields. The suit alleged the defendants
violated ERISA by paying unreasonable compensation and fees to ABS, failing to
prudently invest the plan’s cash assets, paying excessive fees relating to the
collection of employer contributions owed to the plans, and making mortgage
loans to participants which did not comply with the terms of the pension plan
document.
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The
case resulted from an investigation conducted by the Labor Department’s
Detroit District Office of the Pension and Welfare Benefit Administration (PWBA).
The consent judgment was entered in the federal district court in Detroit.
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“Our
action reaffirms the department’s commitment to protect the benefits promised
to employees,” said Paul Baumann, acting district supervisor in PWBA’s
Detroit Office.
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Employers
and workers can reach the Detroit PWBA Office at 313.226.7450 for help with
problems involving private-sector pension and health plans.
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(Chao
v. Walter R. Mabry, et al
Civil
Action No. 00-73747 (Judge Avern Cohn))
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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.
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