The U.S. Department of Labor has sued Alto,
Mich.-based Snyder Farm Supply and its majority owner Thomas E. Snyder, who
also administered the Snyder Farm Supply 401(k) pension plan, for their failure
to bond the pension plan offered to the companys employees.
The lawsuit, filed today in federal district court
in Grand Rapids, cites the defendants continuing fiduciary violation of
the Employee Retirement Income Security Act of 1974 (ERISA) for failing to
maintaining a fidelity bond. ERISA Section 412 requires that fiduciaries of
private sector pension plans obtain a bond in the minimum amount of 10 percent
of the amount of plan funds handled, to protect employee benefit plans against
loss caused by acts of fraud or dishonesty.
The department is seeking to have the federal
court (1) order to defendants to obtain and maintain a fidelity bond to meet
the requirements of ERISA Section 412; and (2) remove Thomas Snyder as the plan
administrator and be replaced by an independent trustee, who will subsequently
administer and/or terminate the plan.
At various times during the plans five-year
existence, there have been as many as 44 plan participants and assets of
$241,651. Most recently, the plan had 14 plan participants and $44,535 in
assets as of Nov. 28, 2000.
The complaint is a result of an investigation by
the Cincinnati Regional Office of the departments Pension and Welfare
Benefits Administration, which oversees federal pension law.
(Herman v. Thomas E. Snyder and Snyder Farm
Supply Inc. 401(k) Plan Civil Action # 1:00CV 887 |