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News Release

PENSION AND WELFARE BENEFITS ADMINISTRATION: 062-VA
ISSUED BY PHILADELPHIA OPA

ALEXANDRIA PENSION FUND OFFICIALS TO REPAY MORE THAN $500,000 FOR IM PROPER INVESTMENTS

The U.S. Department of Labor came to an agreement today with Dynamic Systems, Inc. of Alexandria, Va. and officials of its 401(k) plan to recover $525,000 for plan participants. In a simultaneous complaint and consent judgment, the department alleged the defendants caused the plan to suffer a loss by improperly investing in guaranteed investment contracts (GICs) issued by the now defunct InterAmerican Insurance Company of Illinois.

The recouped funds will be allocated among all plan participants other than the defendants who are plan officials David Bennet, L. John Fleischmann, Robert Einzig, George Kenaston and R. Kenneth Misner, all located in the Washington metropolitan area. In agreeing to the settlement, the defendants did not confirm or deny the department's allegations.

According to the lawsuit, the defendants allegedly failed to evaluate the financial stability, creditworthiness and claims-paying ability of InterAmerican before investing plan assets with the company. InterAmerican was placed in receivership by the Illinois State Insurance Commission in December 1991.

The lawsuit also alleged that the defendants did not monitor the investments to determine whether the plan should continue to hold them or did not understand and/or act on adverse information in their possession concerning the insurance company's financial position.

The court actions are the result of an investigation by the Washington, D.C. district office of the department's Pension and Welfare Benefits Administration into alleged violations of federal pension law. They were filed in the federal district court for the District of Maryland in Baltimore on April 7.

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(Metzler v. Bennet)
Civil Action L97-1022

Archived News Release — Caution: Information may be out of date.

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