Compliance November 19, 2010

Savings Plan Embezzler Indicted

November 19, 2010 (PLANSPONSOR.com) - A federal indictment unsealed this week in the District of Minnesota alleges that a 62-year-old New Prague, Minnesota man embezzled approximately $642,166 from his company’s employee benefit plan.

 

Reported by

The indictment charges Delroy Joseph Sand, Jr., with one count of embezzlement and theft from an employee benefit plan, and also charges him with one count of failure to file a required report and one count of obstruction of agency proceedings. The indictment was unsealed following Sand’s initial appearance in federal court, according to a press release from the U. S. Attorney’s Office for the District of Minnesota.

The indictment states that from February of 2008 through September of 2009, Sand was the trustee for the employees’ retirement savings plan at Hecla, Inc., a business that provides adult foster care as well as group home and mental health services in Minnesota. The company benefit plan was established in 1985, and under law, an annual financial report regarding the plan must be filed with the federal government.

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

Sand, however, allegedly failed to file the financial report for 2008, according to the press release, and he purportedly stole money from the plan.  Then, in October of 2009, he obstructed an examination of the plan by the United States Department of Labor. Specifically, the indictment states he failed to provide documentation necessary for the examination and, instead, offered false information throughout the review process.

If convicted, Sand faces a potential maximum penalty of ten years in prison on the failure to file a required report charge and five years each for embezzlement and obstruction of proceedings. All sentences will be determined by a federal district court judge.

This case is the result of an investigation by the U.S. Department of Labor – Employee Benefits Security Administration, with assistance from the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney William J. Otteson.

Benefits November 18, 2010

Retirement Plan Participation Dips, But…

November 18, 2010 (PLANSPONSOR.com) – A new report suggests that workplace retirement plan participation is down, but better than it has been in the past decade.

 

Reported by

The Survey of Income and Program Participation (SIPP) data, reported in the November issue of EBRI Notes, shows that 59% of all workers over age 16 had an employer that sponsored a pension or retirement plan for any of its employees in 2009.  While that was down from previous levels – 60% in 1998 and 63% in 2003 – it was the same level as reported in 2006. 

Moreover, workers participating in a plan increased to 45% in 2009, up slightly from 2006 (44%), though lower than the 48% reported in 2003.

Get more!  Sign up for PLANSPONSOR newsletters.

The vesting rate (the percentage of workers who say they were entitled to some pension benefit or lump sum distribution if they left their job) stood at 42% in 2009, nearly double the 24% reported in 1979. However, according to the report’s authors, this increase is largely due to the increased number of workers participating in defined contribution retirement plans (such as 401(k) plans), where employee contributions are immediately vested, and faster vesting requirements in private plans.

Defined contribution plans were the primary plan for 60% of those with a workplace retirement plan, while defined benefit (pension) plans were the primary plan for 39% percent of workers.

Contribution Rates

While the participation level in salary reduction plans (and their status as a worker’s primary plan) decreased, the average employee contribution for workers who reported a positive employee contribution to these plans remained virtually unchanged in 2009 (7.4%), compared with 2006 levels (7.5%), though it was much higher than the 6.6% rate in 1988, according to the report. 

On the other hand, the distribution of the contribution rates moved to a higher percentage of the lower contributors from 1993 to 2009, with the percentage of those contributing 5% or less increasing from 44.8% in 1993 to 48.9% in 2009.  “Consequently, the high contributors—those who contributed 10% or more—were more likely to contribute a higher amount in 2009 than in 1993 and to have a higher overall average contribution,” according to the report.

More information is available at http://www.ebri.org/pdf/notespdf/EBRI_Notes_Nov10_RetPart_HCS1.pdf

«