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Financial Application Consulting Services, Inc. in
Livonia, Mich., and trustees of the company’s 401(k) plan were ordered to
collectively restore $222,503.86 to the plan in a consent order and judgment
obtained by the U. S. Department of Labor.
The judgment resolves a lawsuit filed on July 1,
1999 alleging that the company and trustees Steven Kandt, Stephen Rupe and
Roger Jelsma violated the Employee Retirement Income Security Act (ERISA) by
failing to promptly remit 401(k) contributions deducted from employees’
paychecks into the plan’s investment accounts for the period Dec. 31, 1988
to Dec. 31, 1997.
The lawsuit also alleged that the defendants
failed to remit matching employer contributions, to collect employer
contributions owed to the plan, and to collect payment on outstanding
participant loans from the plan totaling more than $72,000, a prohibited
transaction under ERISA.
The judgment obtained by the department also
stipulates that: the money restored to the plan be credited to the pension
accounts of all participants, excluding the defendants; the court appoint an
independent fiduciary to manage the plan; and the defendant trustees be
permanently barred from serving or acting as fiduciaries or service providers
to any ERISA-covered plan.
The 401(k) plan provided retirement, death and
disability benefits to 66 employees. As of December 31, 1997, the plan had
$937,684 in assets.
The court action resulted from an investigation
conducted by the Cincinnati Regional Office of the department’s Pension
and Welfare Benefits Administration into violations of ERISA. The consent order
and judgment were entered on July 8, 1999 in the federal district court
in Detroit, Mich.
Herman v. Financial Applications
Consultants
Services, Inc.
Civil Action No. 99-73316 |
