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Release Date: 07/30/2003
Release Number: BOS 2003-187
Contact Name: Rita Ford
Phone Number: 202.693.8671
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New York, New York - The U.S. Department of
Labor sued the trustees of the money purchase plan of Arch-Con Associates
of Whitestone, New York, on July 25, 2003, for failing to forward
approximately $160,000 in employee contributions and abandoning the plan
when the company went out of business. |
“The
law states that trustees have a fiduciary responsibility to manage the
money set aside in retirement plans for the benefit of employees and their
families,” said Secretary of Labor Elaine L. Chao. “The actions of
this company were despicable and this case sends a clear message that the
department will aggressively enforce the law to protect workers’
benefits.” |
Plans
become “orphan plans” when they are abandoned by fiduciaries
designated to manage and operate the plans and their assets. Without plan
fiduciaries, participants and beneficiaries are unable to receive
distributions or make inquiries about their benefits. |
The
suit alleges that Joseph Bordonaro and Paul P. Cohen, the plan trustees
and the owners of Arch-Con, violated the Employee Retirement Income
Security Act (ERISA) by failing to collect about $160,000 in employee
contributions owed to the plan by the company during 1997 to 1999, and
abandoned the plan when Arch-Con became defunct. The suit was filed in
federal district court in Central Islip, New York. |
The suit seeks to have the defendants restore to the
plan all losses attributable to their fiduciary breaches, remove them as
trustees and permanently bar them from serving as fiduciaries to any
employee benefit plan covered by ERISA. The suit also seeks to appoint an
independent trustee to administer the plan and distribute its assets. |
In
May 2003, the department filed adversary complaints against the defendants
in U.S. bankruptcy courts in Central Islip and Poughkeepsie, New York, to
prevent them from avoiding payment of money owed to the plan. |
Arch-Con
employed construction workers on job sites covered by prevailing wage
contracts with state and local governmental units in metropolitan New
York. |
The
case resulted from an investigation conducted by the New York regional
office of the department’s Employee Benefits Security Administration.
Employers and workers can contact the regional office at 212.607.8600 or
EBSA’s toll free number, 1.866.444.EBSA (3272), for help with problems
relating to private-sector pension and health plans. |
(Chao
v. Bordonaro)
Civil Action No. 03-Civ-3643 (LDW)(WDW) |
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. |