Compliance October 24, 2012

Md. Men Plead Guilty to Pension Theft

October 24, 2012 (PLANSPONSOR.com) – Two Maryland men pled guilty to engaging in a scheme to steal more than $9 million from an employee pension plan.
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According to their plea agreements, Robert Fulton Rood and Nikolaos M. Hepler agreed to scheme to defraud Vienna-based Southern Management Corporation’s (SMC’s) employee pension plan, Southern Management Corporation Retirement Trust (SMCRT).

Rood presented loan application packages to and subsequently executed purchased agreements with SMC’s loan committee. SMCRT used funds to invest in these loans to borrowers. The borrowers would use loaned funds to purchase real estate, finance construction and make monthly interest payments. The loans were generally for one year. At the end of the loan period, the loans were to be repaid with funds ultimately paid to SMCRT.

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Court papers said Rood and Hepler concealed the re-routing of funds due to SMCRT into accounts maintained by Rood. The men also misrepresented that certain loans were active, even when they were failed to settle or were paid off early. Rood directed co-conspirators Hepler and Lloyd Mallory Jr., a certified public accountant to create a false report regarding loan files intended to mislead SMCRT about the true status of their investment. The government asserts that SMCRT suffered a loss of $9,574,853 as a result of the conspiracy.

Rood and Hepler were charged on December 13, 2011, in a 16-count indictment of conspiracy to commit wire fraud and theft from the plan. Rood faces a maximum penalty of 20 years and Hepler a maximum penalty of five years in prison.

Products October 24, 2012

HORAN Creates Health Care Reform Impact Tool

October 24, 2012 (PLANSPONSOR.com) – Employee benefit consultant HORAN launched a tool to model different plan scenarios to help navigate potential effects of health care reform.
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The model outcomes include offering a plan at the minimum allowable benefit (60% actuarial value), terminating the plan and maintaining current benefits. The tool addresses questions such as what it will costs to continue a current plan in 2014, to terminate a current plan in 2014, and what a minimum value plan looks like.

“Many of our larger employer clients (those with 50 full-time employees) under the law are concerned about the employer shared responsibility provisions and the exposure their organization may have to penalties and increasing enrollment in 2014,” said Valerie Bogdan Powers, vice president of group operations at HORAN.

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