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Archived News Release — Caution: Information may be out of date. OPA Press Release: LABOR DEPARTMENT RECOVERS $4.95 MILLION FOR
ELECTRICAL WORKERS PENSION FUND
WASHINGTON-- On Oct. 16, 2001, the U.S. Department of Labor
obtained a consent order requiring the trustees of the National Electrical
Benefit Fund in Rockville, Md., to pay $4.95 million to the fund as restitution
for making an imprudent loan of pension assets and an imprudent purchase of
shares in a limited partnership in 1992 and 1993.
The consent order provides that trustee John M. Grau and former trustee
Jack F. Moore will pay a civil penalty of $550,000, to be assessed by the
department under section 502(l) of the Employee Retirement Income Security Act
(ERISA).
This restitution will resolve the department’s lawsuit and will
return money to pay promised retirement benefits.
On May 5, 1999, the department sued the trustees for imprudently loaning
plan assets to Columbia Land and Development Corporation to acquire and develop
land in Orlando, Fla., known as Country Run. The Department alleged that the
trustees should have known that the loan could not be repaid in full with
interest.
“This aggressive settlement is part of our commitment to crack down
on pension fund abuses by union and management officials. We will do everything
in our power to protect union members’ pensions from being preyed upon and
misspent,” said Labor Secretary Elaine L. Chao.
The fund is a collectively bargained defined benefit pension plan funded
by contributions of participating employers. As of Dec. 31, 1999, the fund
covered over 440,000 union workers with approximately $9.2 billion in
assets.
The consent order, entered in federal district court in Greenbelt, Md.,
resulted from an investigation conducted by the Washington District Office of
the Philadelphia Regional Office of the Pension and Welfare Benefits
Administration into alleged violations of the Employee Retirement Income
Security Act.
(Chao V. Moore) Civil Action No. AW-99‑1283
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Archived News Release — Caution: Information may be out of date.
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