A Fridley, Minn.-based company and its 401(k) plan
official have been sued by the U.S. Department of Labor for failing to forward
withheld employee contributions to the plan in a timely manner, and, when
subsequently repaying the plan $97,767.57 of the delinquent contributions due
to the plan, further failing to repay plan lost opportunity costs to plan
participants for the defendants use of the money. Using the plans
rate of return, the department calculated that $37,866 in lost interest
earnings is still owed the plan.
Med-Voc Associated, Inc., which provides
rehabilitation counseling for workers compensation claimants, and its
sole owner/plan trustee Michael W. Evavold allegedly withheld voluntary
employee contributions to the 401(k) plan on an intermittent basis from May
1993 to July 1997, retained these contributions for Med-Vocs own general
assets and failed to remit those amounts promptly to the plans investment
account.
In addition, the departments lawsuit alleges
that the defendants failed to obtain a fidelity bond in the minimum amount of
ten percent of the plan funds. The plan had 37 participants and total assets of
$579,588 as of June 30, 1998.
The lawsuit seeks to have the lost opportunity
costs paid to the plan, for an adequate fidelity bond to be obtained and for
Evavold to be barred permanently from serving in any fiduciary capacity to any
employee benefit plan covered by the Employee Retirement Income Security Act
(ERISA).
Our goal is to assure that consumers know
that the department is only a phone call away to help protect the benefits
promised by employers, said Gregory Egan, director of the Kansas City
Regional Office of the departments Pension and Welfare Benefits
Administration, which conducted the investigation into alleged violations of
the federal pension law. Employers and workers can reach the Kansas City office
at (816) 426-5131 for help with any problems relating to private-sector pension
and health plans.
The complaint was filed in the federal district
court in Minneapolis on April 17, 2000.
(Herman v.Med-Voc Associates, et al ) Civil
Action No. 00-CV-978 ADM/AJB |