Printer
Friendly Version
Release Date: March 27, 2006
Release Number: 06-537-CHI
Contact Name: Brad Mitchell
Phone Number: 312.353.6976
Minneapolis, Minnesota - The U.S. Department of Labor has filed an adversary complaint against Karl R. Hunt, president and sole owner of K-H Construction, Inc, Medford, Minnesota, to prevent Hunt from discharging a debt of $4,672.12 owed to the company’s Simple IRA Plan.
“The Labor Department filed suit so that the plan and its participants will not be barred from seeking money they are owed,” said Steven R. Eischen, director of the Kansas City regional office of the department’s Employee Benefits Security Administration (EBSA), which investigated the case. “Even when a plan fiduciary declares personal bankruptcy, we act to ensure that the money owed to the plan participants is not lost.”
The complaint, filed in bankruptcy court in Minneapolis, alleges that Hunt violated his fiduciary duties under the Employee Retirement Income Security Act (ERISA) when he failed to forward employees’ contributions to the plan that were withheld from employees’ paychecks from December 2003 through January 2005.
The complaint asks the court to declare as non-dischargeable in the bankruptcy action the debt created when Hunt failed to forward employee salary deferrals to the plan plus lost earnings on those deferrals. K-H Construction, Inc. was in the construction business. As of the bankruptcy filing, the plan had five participants that were affected.
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 any applicable excise taxes. For more information about the VFCP, see www.dol.gov/ebsa.
In fiscal year 2005, EBSA achieved monetary results of $1.7 billion related to pension, 401(k), health and other benefits for millions of American workers and their families. Employers and workers with questions or concerns regarding their private-sector pension and health plans can contact the EBSA regional office in Kansas City at 816.426.5131 or EBSA’s toll free number, 1.866.444.EBSA (3272). Information is also available from the agency’s Web site at www.dol.gov/ebsa.
(Chao v. Hunt) Civil Action No. 06-3167
U.S. Department of Labor news releases are accessible on the
Department's Newsroom
page. The information in this news release will be made available
in alternate format upon request (large print, Braille, audio tape or
disc) from the COAST office. Please specify which news release when
placing your request at 202.693.7765 or TTY 202.693.7755. The U.S.
Department of Labor is committed to providing America's employers and
employees with easy access to understandable information on how to comply
with its laws and regulations. For more information, please visit the
Department's Compliance
Assistance page.
|