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Release Date: December 12, 2007
Release Number: 07-1896-CHI
Contact Name: Brad Mitchell/Scott Allen
Phone Number: 312.353.4807/312.353.6976
Mentor, Ohio – The U.S. Department of Labor
has reached agreement with Kevin A. Tenkku, president of MED-XS
Solutions Inc. in Mentor, requiring him to pay $38,612.17 to the company’s
401(k) plan and removing him as a fiduciary to the plan.
In a consent judgment filed in federal district court
in Cleveland, Tenkku agreed to pay the funds after he failed to forward
employee contributions and loan repayments to the company’s 401(k)
plan during various periods beginning in June 2002. Failing to forward
such contributions and repayments in a timely manner is a violation of
the Employee Retirement Income Security Act (ERISA).
“The department will act when plan fiduciaries fail
to carry out their duty to protect the retirement plan assets held on
behalf of participants,” said Joseph Menez, director of the Labor
Department’s Employee Benefits Security Administration (EBSA) district
office in Cincinnati.
Tenkku further agreed not to receive distributions
from his own 401(k) funds until the amounts owed to the company 401(k)
plan are paid in full. In addition, the consent judgment requires Tenkku
to liquidate the plan and distribute assets as appropriate.
Employers with similar problems who are not yet the
subjects of EBSA investigations may be eligible to participate in the
department’s Voluntary Fiduciary Correction Program (VFCP).
Participation in the VFCP requires employers to make workers whole but
allows them to avoid EBSA enforcement actions and civil penalties as
well as any applicable excise taxes. For more information about the VFCP,
see www.dol.gov/ebsa.
This suit resulted from an investigation conducted by
EBSA’s Cincinnati Regional Office. Employers and workers can reach the
Cincinnati office at 859.578.4680 or through EBSA’s toll-free number,
1.866.444.EBSA (3272), for help with problems relating to private sector
retirement and health plans. In fiscal year 2006, EBSA achieved monetary
results of $1.4 billion related to pension, 401(k), health and other
benefits for millions of American workers and their families.
Chao v. MED-XS
Civil Action Number 1:07-cv-2239
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Department's Newsroom
page. The information in this news release will be made available
in alternate format upon request (large print, Braille, audio tape or
disc) from the COAST office. Please specify which news release when
placing your request at 202.693.7828 or TTY 202.693.7755. The U.S.
Department of Labor is committed to providing America's employers and
employees with easy access to understandable information on how to comply
with its laws and regulations. For more information, please visit the
Department's Compliance
Assistance page.
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