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An Anniston, Ala., non-profit corporation
and the former trustee of its 401(k) profit sharing plan were sued by the U. S.
Department of Labor on July 8 for failure to timely remit more than $11,000 of
employee contributions to the plan.
Named as defendants in the lawsuit were Community
Action Agency of Calhoun, Cleburne & Cherokee Counties, Inc. (CAA), the
plan’s sponsor, and Dr. Nimrod Q. Reynolds, who was the corporation’s
former executive director and the plan’s trustee.
CAA employees were required to contribute five
percent of their compensation to the 401(k) profit sharing plan, which became
effective on April 15, 1992. On Aug. 31, 1995, the plan had 95 participants and
assets totaling $340,131.
The lawsuit alleged from Oct. 15, 1996, to June
30, 1997, CAA failed to remit to the plan $11,849.37 that was withheld from
employees’ compensation for contribution to the plan, in violation of the
Employee Retirement Income Security Act (ERISA). The funds were used to finance
CAA’s operations.
The lawsuit seeks to:
- -- restore to the plan all losses, plus $462.95 of interest
estimated on outstanding employee contributions through March 1999;
- - have defendant Reynolds permanently bared from serving as a
fiduciary to any employee benefit plan covered under ERISA; and
- - require the plan to set off Reynold’s individual plan
account in an amount necessary to restore the losses to the plan and
redistribute that amount to the remaining participants.
The lawsuit resulted from an investigation
conducted by the Atlanta Regional Office of the Pension and Welfare Benefits
Administration into alleged violations of ERISA. The lawsuit was filed in the
federal district court in Birmingham, Ala.
Herman v. Community Action Agency of Calhoun,
Cleburne & Cherokee Counties, Inc. et. al.
Civil Action No. CV 99
L-1747-E -- |
