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Compliance December 1, 2006
DoL Says Stock Windfall Belongs to Participants
December 1, 2006 (PLANSPONSOR.com) - The Department
of Labor (DoL) announced it is suing the Iowa Association of
Business and Industry over a stock windfall that the
organization retained rather than turn over to its member
companies' benefit plans.
Reported by Rebecca Moore
According to the announcement, the dispute involves 870,393 shares in Principal Financial Group the association received when Principal converted from a mutual insurance company into a public corporation in 2001. The association’s member companies participated in a group insurance program operated by the group that provided discounts on health, life and disability benefits through Principal.
The DoL said, based on federal employee-benefits law, the association’s program was a collection of individual company plans, which are entitled to the proceeds of the Principal stock. “The benefit plans belonging to these Iowa businesses and workers are due millions of dollars, and the department is seeking a court judgment to recover these assets for them,” said Secretary of Labor Elaine Chao, in the announcement.
The association sold the stock and the proceeds, now worth $29 million, and are held in a trust.