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Release Date: 03/29/2000 Release Number:
00-68 Contact Name: Mike Shimizu Phone Number:
206.553.7620 |
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Los Angeles - The U.S. Department of Labor
announced today settlement agreements and consent decrees were entered March
23, 2000, by the U.S. District Court for the Central District of California,
resolving a suit against Avacon Corporation, a corporation based in Walnut,
Cal., and four current and former Avacon officials and pension plan trustees.
The Avacon Corporation 401(k) Plan was named for the purpose of affecting
relief for the fiduciary duty violations under the Employee Retirement Income
Security Act (ERISA). |
According to Billy Beaver, Los Angeles regional
director of the Pension Welfare Benefits Administration (PWBA), defendants
Avacon and Jaycee Kim, Avacons president and plan trustee, admitted
liability for violations of ERISA which resulted in losses totaling $56,239
plus interest to the plan. |
The department sought full restitution from
Avacon, Jaycee Kim, and former plan trustees David Kim, Joseph Garcia, and
Rodney Allen for all losses suffered by the plan due to their failure to
forward and failure to forward in a timely manner employee contributions to the
plan. |
Under the terms of the Avacon 401(k) Plan,
employees were permitted to make contributions to the plan by designating
amounts to be withheld from their paychecks, From April 1, 1994, through August
2, 1996, Avacon withheld money for employee contributions from employees
paychecks but failed to forward the contributions to the plan in a timely
fashion, the delay ranging from 39 to 228 days. Rather than timely forwarding
these contributions, the money remained commingled with the general assets of
Avacon, depriving the plan participants of $6,344 in interest. From August 16,
1996, through March 28, 1997, Avacon withheld $38,611 from employees
paychecks. These contributions, however, were never forwarded to the plan but
were instead commingled with Avacons general assets. |
As a result of the settlements, Avacon, Jaycee Kim
and David Kim agreed to pay to the plan $56,239 to correct all prohibited
transactions and restore all losses attributable to their fiduciary breaches,
including interest and lost opportunity costs, Beaver said. Further, Jaycee Kim
agreed to resign from his position as plan trustee in favor of an independent
fiduciary who will have full discretionary authority to administer the
plan. |
All defendants agreed to permanent injunctions
against serving as fiduciaries of or service providers to any employee benefit
plans covered by ERISA. |
These settlements resulted from an investigation
conducted by the Los Angeles Regional Office of PWBA, headed by Beaver. It is
part of an ongoing initiative to insure compliance with ERISA fiduciary
standards with respect to the proper deposit of employee contributions to
401(k) retirement plans. |
Note to editors: Civil Action File Number 00-02933
JSL
(Alexis M. Herman, Secretary of Labor, United
States Dept. of Labor v. Avacon Corp., et al) |
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 202.693.7775. |
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