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Compliance March 20, 2020
401(k) Plan Fiduciaries to Pay for Failure to Remit Participant Loan Repayments
A court judgment requires the fiduciaries to not only restore the unremitted repayments to the plan, but also $16,782.80 in interest on the unremitted loan repayments.
Reported by PLANSPONSOR Staff
The U.S. District Court for the Eastern District of Virginia has issued a default judgment requiring defendants JWK Corp., its chief executive officer and the director of operations to restore $103,098 to the company’s 401(k) plan.
A Department of Labor (DOL) Employee Benefits Security Administration (EBSA) investigation that found that from July 15, 2013, to September 30, 2016, the plan fiduciaries violated the Employee Retirement Income Security Act (ERISA) when they withheld employee loan repayments and failed to remit them to the company’s 401(k) Salary Savings Plan.
The default judgment requires the defendants to restore $86,315 to the plan, plus $16,782.80 in interest on the unremitted loan repayments. The judgment also removes the defendants as plan fiduciaries and appoints an independent fiduciary to terminate the plan and distribute the plan’s assets to the 25 participants. In addition, it permanently enjoins the defendants from serving as fiduciaries to any ERISA-covered plan.