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The U.S. Department of Labor today sued two
Minneapolis-based companies and their retirement plan official for self-dealing
violations of federal pension law which resulted in losses to the plan’s
participants.
The defendants are Metal Masters of Minneapolis,
Inc.; JRS Enterprises Inc.; the companies’ retirement savings plan and
Janet Bjornstad, the retirement plan trustee. Metal Masters, incorporated in
1964, originally made gears but now does turning, milling and precision
machining. JRS, which overhauls World War II airplances, is headquartered with
Metal Masters; and Bjornstad serves both companies as chief executive officer.
The companies established the participant-directed
defined contribution plan on May 2, 1990, to provide retirement, death and
disability benefits to their employees. The plan had $133,481 in assets and 13
participants as of Dec. 31, 1996.
According to the department’s lawsuit,
voluntary employee contributions withheld from their paychecks from the period
March 1, 1996 through Nov. 30, 1998, were not remitted to the plan in a timely
fashion, and during the period of Dec. 1, 1997 through June 30, 1998, no
withheld contributions were forwarded to the plan at all. The lawsuit alleges
the monies intended for the savings plan were retained in the companies’
general asset fund.
The department is seeking to have the defendants
restore the losses, plus interest, resulting from their breaches of the
Employee Retirement Income Security Act. The complaint seeks to have Bjornstad
removed from her position with the plan and permanently barred from serving as
a fiduciary to any plan covered by ERISA. The complaint also seeks to have the
court name an independent fiduciary to manage the plan.
The lawsuit resulted from an investigation
conducted by the Kansas City Regional Office of the department’s Pension
and Welfare Benefits Administration into alleged violations of the Employee
Retirement Income Security Act. The complaint was filed April 22 in federal
district court in Minneapolis.
(Herman v. Metal Masters of Minneapolis,
Inc..)
Civil Action No. 99 -CV -632 |
