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Release Date: 10/22/2002
Release Number: 12
Contact Name: Rita Ford
Phone Number: 202.693.8671
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Kansas City, Missouri - In a judgment obtained
on September 24 by the U.S. Department of Labor, an Iowa City, Iowa,
automotive corporation and its co-owner were ordered to restore $14,538 to
the corporation’s 401(k) profit sharing plan for violating federal
pension law by failing to forward contributions to the plan. |
“The Department of Labor is committed to protecting
the benefits promised by employers,” said Gregory Egan, director of the
department’s Kansas City regional office of the Pension and Welfare
Benefits Administration. |
A suit filed simultaneously with the judgment on August
2, names as defendants Warren Automotive, Inc. and Warren Birely, the plan
administrator and trustee, respectively, alleging that from October 1998
through December 2000, they failed to timely deposit contributions
withheld from employees’ paychecks, and in 2001 failed to submit
employer matching contributions to the plan. |
The defendants violated the Employee Retirement Income
Security Act (ERISA) by failing to act solely in the interest of the
participants, failing to hold the plan assets in trust, and engaging in
transactions that constituted a conflict of interest. |
Warren Automotive, Inc., an auto body repair shop
founded in 1978, specializes in restoration of antique cars. The
401(k) profit sharing plan, established in May 1998, had 10 participants
and was reduced to five by December 2000. |
Regional Director Gregory Egan noted that employers
with similar problems, who are not yet the subject of an investigation by
EBSA, 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 EBSA enforcement
actions and civil penalties as well as applicable excise taxes. |
For more information about the VFCP see www.dol.gov/ebsa. |
The judgment resulted from an investigation conducted
by EBSA’s Kansas City regional office into alleged violations of ERISA.
Employers and workers can reach the regional office at 816.426.5131 or
EBSA’s Toll-Free Employee & Employer Hotline number, 1.866.275.7922,
for help with problems relating to private-sector pension and health
plans. |
The judgment was entered in the federal district court
in Des Moines, Iowa.
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(Chao v. Birely
Civil Action No. 3 02CV70087) |
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. |