Release Date: July 2, 2008
U.S. Labor Department sues former South Carolina executive to recover more than $44,000 for American Fittings SIMPLE IRA
Atlanta – The U.S. Department of Labor has sued Carl E. Reid, a corporate officer of defunct American Fittings Inc., for violating the Employee Retirement Income Security Act (ERISA) by failing to remit employee contributions to the company’s Savings Incentive Match Plan for Employees individual retirement account (SIMPLE IRA).
“This money belongs to the employees for their future retirement, and the company cannot divert these funds for its own needs,” said Rebecca Marshall, director of the Atlanta Regional Office of the department’s Employee Benefits Security Administration (EBSA), which investigated this case.
The suit alleges that Reid withheld $44,189 from employees’ salaries but failed to segregate the funds from those of the former Travelers Rest, South Carolina company, and did not forward the money to the plan. The Labor Department seeks to recover the contributions for the benefit of the plan’s participants.
The suit also asks the court to remove the defendant as fiduciary of this plan, bar the defendant from serving as fiduciary of any ERISA-covered plan, and appoint a successor fiduciary to receive any funds recovered and distribute any proceeds to the 50 participants.
American Fittings Inc. was a manufacturer of stainless steel tube fittings.
Employers with similar problems who are not yet subjects of EBSA investigations may be eligible to participate in the department’s Voluntary Fiduciary Correction Program. Participation 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, see www.dol.gov/ebsa.
Employers and workers can reach EBSA’s Atlanta Regional Office at 404.302.3900 or toll-free at 866.444.3272 for help with problems relating to private sector retirement and health plans. In fiscal year 2007, EBSA achieved monetary results of $1.5 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.
Chao v. Carl E. Reid
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