Compliance June 18, 2012

DOL Secures 401(k) Funds from Government Contractor

June 18, 2012 (PLANSPONSOR.com) – The former CEO of a defunct Southern California electrical contractor has agreed to restore more than a half-million dollars in 401(k) funds to employees.
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Mark Dell Donne, who served as a fiduciary of Aliso Viejo-based Journey Electrical Technologies Inc.’s retirement plan, agreed to restore $570,983 in 401(k) funds, to settle a Department of Labor (DOL) lawsuit. He has already restored $98,748 to the plan’s accounts.

The DOL’s lawsuit resulted from an investigation by its Employee Benefits Security Administration (EBSA), which determined that between January 2004 and March 2008, some of the employees’ wages for work performed on public works projects were deposited in the company’s general funds instead of the workers’ 401(k) plan accounts as required under the government contracts. Employee elective 401(k) contributions and participant loan payments also were not forwarded for deposit into plan accounts, in violation of the Employee Retirement Income Security Act (ERISA).

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The plan had 105 participants and a balance of more than $1.9 million as of Dec. 31, 2010, the latest information available.

“We are pleased to be able to secure these retirement funds for the company’s former employees,” said Phyllis C.  Borzi, assistant secretary of labor for employee benefits security. “Employees working on government construction or service contracts are often unaware of the benefits they are entitled to under prevailing wage laws, including fringe benefit payments to their employee benefit plans. Plan fiduciaries have a legal responsibility to ensure that this money is properly deposited in employee accounts.”

Benefits June 18, 2012

Companies Not Confident in Understanding ACA Requirements

June 18, 2012 (PLANSPONSOR.com) - Just 40% of HR decision makers from large organizations are very confident about their understanding of employer requirements under the Affordable Care Act (ACA), according to an ADP Research Institute survey.
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Even fewer respondents in small companies (20%) and mid-sized companies (17%) expressed that same level of confidence.   

A majority of human resource and benefits decision makers at small and mid-sized companies (67% and 62%, respectively) indicated they are unaware of the upcoming employee notification requirement about public exchanges. Thirty-two percent of survey respondents from large organizations indicated a similar lack of awareness.  

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As for being ready to provide the newly required summary of benefits and coverage, 66% of large companies, 50% of mid-sized companies and 31% of small businesses say they are prepared.   

ADP recently surveyed more than 800 human resource and benefits decision makers in U.S. organizations of all sizes.  

Full results of the survey are here.

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