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Release Date: 12/10/1998
Release Number: NY
227
Contact Name: Rita Ford
Phone Number: 202.219.8922 |
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The trustee of a profit sharing plan covering the employees of
General Steel Fabricators, Inc. in Latham, New York, agreed to appoint a
successor trustee to manage the plan under the terms of a consent order and
judgment obtained by the U.S. Department of Labor. |
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The trustee has already restored $42,521.20 to the plan, which
will be credited to the accounts of eligible participants. |
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A lawsuit filed simultaneously with the judgment on November 25
alleged that trustee Thomas Teichner and the company segregated the pension
assets of terminated employees and imprudently invested those funds in money
market investments paying a low rate of return. Plan fiduciaries are not
relieved of their responsibilities under the Employee Retirement Income
Security Act (ERISA), which governs plans such as this one, merely because
participants have terminated their employment with the plan sponsor. Plan
fiduciaries, among other things, must consider whether investments are prudent
in light of the investment needs of the plan and all its participants, even
those participants whose employment has been terminated. |
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The lawsuit also alleges that the defendants failed to hold plan
assets in trust and operated the plan without a designated trustee. The General
Steel Fabricators Employees Profit Sharing and Retirement fund was established
on March 1, 1977 and had assets totaling $2,448,793. It covered 26 employees as
of December 31, 1996. |
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The lawsuit and consent judgment resulted from an investigation by
the Boston Regional Office of the Pension and Welfare Benefits Administration
into violations of ERISA. |
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federal district court in Syracuse, New York, on December 4. |
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Herman v. Teichner Civil Action No. 98-Civ-1852 |
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U.S. Department of
Labor news releases are accessible on the Internet. The information in this
news release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing your
request. Call 202.693.7773 or TTY 202.693.7755. |
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