Office of Public Affairs San Francisco CA
For Immediate Release: October 22, 2013
Contact: Deanne Amaden or Jose A. Carnevali
Phone: 415-625-2630 or 415-625-2631
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Release Number: 13-1890-SAN (SF-180)
California magazine publisher ordered by US Department of Labor to restore nearly $364,000 to employee pension plan
SANTA MONICA, Calif. — The U.S. Department of Labor has secured a consent judgment with former magazine publisher Twelve Signs Inc. and its president, Richard Housman. An investigation by the department's Employee Benefits Security Administration established that Housman, acting as the sole fiduciary to the employee pension plan, violated the Employee Retirement Income Security Act by mismanaging plan assets, resulting in the loss of $617,839. The judgment requires Housman to restore all losses caused to the plan, less his share.
As the plan's fiduciary, Housman had a responsibility to act solely in the interest of the company's money purchase pension plan and its participants. Investigators found that he breached that responsibility when he made prohibited transactions to benefit the company. Over three years, Housman authorized 41 separate loans totaling $496,000 from the plan to the company. The loans, which were not repaid, were used to cover operational expenses, including payroll. The plan also lost $122,000 in estimated interest. Housman had guaranteed that money would be included in the loan repayment.
"Workers should not have to worry about whether their pension funds are secure in the hands of their pension plan's fiduciaries," said Ty Fukumoto, deputy director of the EBSA Los Angeles Regional Office, which investigated the case. "The department holds those entrusted with looking after workers' retirement savings to the highest legal standards."
The consent judgment orders Housman to restore $363,913 in losses to the plan's remaining participants. To ensure repayment, Housman must attempt to secure a life insurance policy that provides no less than $150,000, and names the plan as the sole beneficiary. Housman must report his financial status to the department annually until plan losses are fully restored. He will no longer serve as the plan fiduciary, and is permanently enjoined and restrained from future service as a fiduciary of, or service provider to, any ERISA-covered employee benefit plan. Jeanne Bryant of Receivership Management Inc. has been assigned as independent fiduciary and will administer the plan. The department's Office of the Solicitor litigated the case.
Twelve Signs was a private corporation that published Starscroll magazine. The company ceased operating in 2009 and filed for Chapter 11 bankruptcy protection in January 2010.
EBSA protects the retirement, health and other workplace-related benefits of America's workers, retirees and their families. The agency oversees approximately 701,000 private-sector retirement plans, 2.3 million health plans and similar numbers of other welfare plans that provide benefits to more than 141 million Americans. Collectively, these plans hold more than $7.3 trillion in assets. Workers participating in employer-sponsored health and retirement benefit plans who feel that they have been denied a benefit inappropriately, or have questions about benefit laws, can contact EBSA's Los Angeles Office at 626-229-1000 or call 866-444-EBSA (3272). To contact an EBSA benefits adviser, visit http://www.askebsa.gov. Additional information can be found at http://www.dol.gov/ebsa.
Perez v. Twelve Signs Inc., Richard W. Housman; Twelve Signs Inc. pension plan
Civil Action File Number: CV 13-7325-DSF-AJW U.S. District Court, Central District of Calif., Western Division
U.S. Department of Labor news materials are accessible at www.dol.gov. The information above is available in large print, Braille, audio tape or disc from the COAST office upon request by calling 202-693-7828 or TTY 202-693-7755.