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Release Date: 12/10/2002
Release Number: 193
Contact Name: Michael Shimizu
Phone Number: 206.553.7620
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San Francisco, California - The U.S. Department
of Labor filed a complaint against the defunct Hafer Steel Company of San
Diego, California, and the trustee of the Hafer Steel Company Profit
Sharing Plan for alleged violations of the Employee Retirement Income
Security Act (ERISA). The department is seeking to obtain a
court-appointed independent fiduciary to manage, terminate, and distribute
the assets of the company’s orphaned profit sharing plan to participants
and beneficiaries. |
Filed November18, 2002, in the U.S. District Court for
the Southern District of California, the suit results from an
investigation by the Los Angeles Regional Office of the department’s
Pension and Welfare Benefits Administration (PWBA). Besides Hafer Steel
Company, the complaint names as a defendant Kenneth Bernard who served as
trustee of the plan. |
According to Billy Beaver, Los Angeles regional
director of PWBA, the alleged violations of ERISA occurred as a result of
Hafer Steel Company and Bernard failing to perform the functions required
of them to administer and manage the plan. Hafer Steel Company and Bernard
failed to take action to terminate the plan and distribute the benefits to
the participants; failed to file required annual reports; failed to
respond to participant requests for information; and failed to appoint a
successor fiduciary to manage, operate and terminate the plan. As of
January 9, 2002, the plan had 11 participants and assets of $408,806, with
additional assets of $22,082 consisting of loans made to participants.
Without direction from a plan fiduciary with discretionary authority, the
custodial trustee is unable to comply with participant requests for
distributions of benefits to which they are entitled to under ERISA. |
The plan is a profit sharing plan that provides for
employer contributions to support benefits for eligible employees of Hafer
Steel Company. |
Plans become “orphan plans” when they are abandoned
by all fiduciaries designated to manage and operate them and their assets.
As a result, participants and beneficiaries are unable to receive pension
distributions and to make inquiries about their benefits. |
(Chao v. Hafer Steel Company, Kenneth Bernard, Hafer
Steel Co. Profit Sharing Plan
Civil Action No. 02 CV 2264J (AJB)) |
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 202.693.7755. |
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