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Compliance April 24, 2017
DOL Investigation Results in Plan Restorations
Department of Labor investigators secured a judgement restoring more than $40,000 to plan participants working for a Michigan tire manufacturer.
Reported by John Manganaro
The Department of Labor (DOL) has collected more than $41,000 for participants of the St. Paul, Minnesota, based Weinhagen Tire Co. Inc. 401(k) Plan.
According to a consent order and judgement obtained in the U.S. District Court for the District of Minnesota, an investigation by the U.S. Department of Labor’s Employee Benefits Security Administration found from at least February 1, 2010, to May 27, 2015, plan fiduciaries withheld $35,363 from employee’s pay for voluntary contributions to the plan.
During that same period, the company retained approximately $29,058 of those contributions in its corporate bank account and used them for general operating expenses, in violation of the Employee Retirement Income Security Act (ERISA).
Weinhagen and Weinhagen Tire Co. restored $4,000 to the plan on September 22, 2016, and an additional $37,754 on November 4, 2016. These actions restored to the plan all losses, including lost opportunity costs, resulting from fiduciary breaches for which they are liable.
Under terms of the consent judgment, the company is “enjoined from violating ERISA in the future,” and Larry Cumpston, Lawrence Cumpston & Associates, is appointed as plan co-administrator, recordkeeper and fiduciary.
The company must also file all delinquent Form 5500 Annual Reports for the plan.