Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.
Compliance February 23, 2012
Defunct Company Ordered to Restore Retirement Plan Assets
February 23, 2012 (PLANSPONSOR.com) – The U.S. Department of Labor (DoL) obtained a summary judgment ordering Compass Capital Partners Ltd. and owner Harris M. DeWese to restore $661,206 to the defunct West Chester, Pennsylvania, company’s retirement plan.
Reported by Tara Cantore
The judgment resolves a lawsuit filed by the DoL in August 2011 that alleged violations of the Employee Retirement Income Security Act (ERISA).
The suit resulted from an investigation by the department’s Employee Benefits Security Administration (EBSA), which found that DeWese withdrew funds from the plan eight times from October 2006 to October 2007 and deposited them in his personal account and a Compass Capital Partners bank account. DeWese then used the plan funds to pay the company’s operating expenses and also transferred a portion of them to Tampa, Flordia-based Hillsboro Printing, a company in which DeWese was a shareholder. Compass Capital Partners ceased operations, and the plan was unable to pay benefits to retired participants as a result of DeWese’s actions.
“These actions show a flagrant breach of fiduciary responsibility,” said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. “We will continue to hold plan sponsors and other responsible parties accountable when they fall short of their legal obligation to protect the hard-earned savings of plan participants.”
Filed in the U.S. District Court for the Eastern District of Pennsylvania, the judgment removes DeWese and Compass as plan fiduciaries and permanently enjoins them from serving as fiduciaries for any ERISA-covered plan. It also appoints Metro Benefits Inc. of Pittsburgh as the independent fiduciary authorized to terminate the plan.