Release Date: February 23, 2009
Release Number: 09-161-ATL (041)
Contact Name: Michael Wald
Phone Number: 404.562.2078
U.S. Department of Labor sues former officer of SCT Yarns for violating ERISA rules
Atlanta – The U.S. Department of Labor has sued Tim J. Manson III for violating provisions of the Employee Retirement Income Security Act (ERISA).
Filed in the U.S. District Court for the Eastern District of Tennessee, the lawsuit alleges that the defendant failed to exercise due diligence when he appointed Kenneth Combs as trustee for the Standard Coosa Thatcher (SCT) Yarns pension plans.
Combs, as a fiduciary to the plans, has been found to have committed a number of prohibited transactions, including the improper purchase of a Park City, Utah, vacation home with pension assets.
The suit alleges that Manson failed to provide oversight that might have disclosed serious deficiencies in the administration of the plan, which he knew or should have known to exist.
“When management fails to exercise discretionary authority in protecting plan participants, the Labor Department will hold management accountable,” said R.C. Marshall, regional director of the department’s Employee Benefits Security Administration (EBSA) office in Atlanta.
SCT Yarns sponsored two retirement plans covering 771 participants, according to the latest data available to the Labor Department. The Pension Benefit Guaranty Corp. took over the retirement plans for hourly and salaried employees in 2001 from the Chattanooga, Tenn.-based company and is paying benefits to retirees.
EBSA previously reached settlements with Costello, Strain & Co. P.C., David Johnston and Belinda Combs regarding their roles with SCT Yarns’ pension plans.
In fiscal year 2008, EBSA achieved monetary results of $1.2 billion related to pension, 401(k), health and other benefits for millions of American workers and their families. 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.
Secretary of Labor v. Tim J. Manson, III, SCT Yarns Inc.
(Civil Action Number 1:2009-cv-00029)
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