For Immediate Release: May 23, 2011
Contact: Michael D'Aquino or Michael Wald
Release Number: 11-684-ATL (235)
US Department of Labor sues architectural design company
to restore more than $135,000 in assets to company’s 401(k) plan
TUCKER, Ga. – The U.S. Department of Labor has sued fiduciaries of architectural company Milton Pate and Associates seeking to recover $135,516 for participants and beneficiaries of the company’s 401(k) profit-sharing plan.
The lawsuit, filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division, alleges that the defendants violated the Employee Retirement Income Security Act by taking prohibited loans from the plan and not forwarding employee contributions to the plan in a timely manner.
The department’s Employee Benefits Security Administration alleges that Milton Pate Sr. took out a loan from the plan that is currently in default with a balance of $94,778. Additionally, his son, Milton Pate Jr., secured three loans from the plan, with a remaining outstanding loan balance of $38,938. Finally, EBSA found that employee contributions to the plan between January 2007 and August 2008 were not forwarded in a timely manner, resulting in lost earnings of $1,800.
“Retirement assets are not a piggy bank to be raided whenever the principals of a company need extra cash. Employees contributed the assets for their future retirement needs, and the Labor Department will not allow fiduciaries to disregard their responsibilities,” said Isabel Colon, EBSA’s acting regional director in Atlanta.
The department is requesting that the court order the defendants to restore all losses to the plan, including interest or lost opportunity costs, and set off the defendants’ individual plan accounts against the amount of losses. Also, the department seeks removal of the defendants from their fiduciary roles, an order barring them from serving in the future as fiduciaries over any plan subject to ERISA, and the appointment of an independent fiduciary at the defendants’ expense.
The retirement plan is set up as a 401(k) profit-sharing plan that allows employees to contribute a portion of their earnings through payroll deductions.
Milton Pate and Associates is an architectural design company with offices in Tucker, Ga., and Charleston, S.C.
This case resulted from an investigation conducted by EBSA’s Atlanta Regional Office. The Labor Department is represented in court by the department’s Office of the Solicitor. Employers and workers can reach the Atlanta office at 404-302-3900 or toll-free at 866-444-3272 for help with problems relating to private sector retirement and health plans. For more information, visit www.dol.gov/ebsa.
Solis v. Milton Pate and Associates Inc.
Civil Action File Number 1:11-cv-01379-SCJ
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