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Compliance May 19, 2006
Company President Ordered to Restore over $400K to Retirement Plans
May 19, 2006 (PLANSPONSOR.com) - The president of
West End Lumber Company of Bridgeport, Connecticut has been
ordered by the Department of Labor's Employee Benefits
Security Administration (EBSA) to restore over $400,000 to
two company-sponsored retirement plans.
Reported by Rebecca Moore
An EBSA press release says Sargent Shaw has 60 days to pay $260,000 to the company’s profit sharing plan and $141,199 to its money purchase pension plan to be distributed to all eligible participants. He is prohibited from serving as a fiduciary for any plan covered by the Employee Retirement Income Security Act (ERISA).
In addition, Shaw has agreed to pay a civil penalty of $80,239.80 to the Department of Labor once restitution to the plans has been made.
In a lawsuit against Shaw, the department alleged that, from November 1, 1998 to June 30, 2002, Shaw failed to adequately diversify plan investments, failing to minimize the risk of large losses to each plan, according to the press release. The suit also alleged that significant losses resulted from these fiduciary violations, and that both the company and Shaw were liable for the losses.