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Release Date: 05/19/2003
Release Number: 232
Contact Name: Rita Ford
Phone Number: 202.693.8671
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Minneapolis, Minnesota - The U.S. Department of
Labor sued Online Data, Incorporated, of Eagan, Minnesota, and two company
officials on May 16, 2003 for failing to remit contributions, withheld
from employees’ paychecks, to the corporation’s 401(k) profit sharing
plan, and commingling these contributions with the corporation’s assets. |
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“This action sends a strong message that the Labor
Department will not tolerate the misuse of plan money and will take action
to return the assets to workers,” said Gregory Egan, director of the
department’s Kansas City regional office of the Employee Benefits
Security Administration (EBSA), which investigated the case. |
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The suit alleges that Richard Benson, company president
and a plan trustee, as well as Sally Benson, a company employee and a
trustee, failed to remit employee contributions to the plan from July 1999
to October 2001. The defendants' failure to segregate the corporation's
and the plan's assets and to administer the plan solely in the interests
of the participants and beneficiaries are violations of the Employee
Retirement Income Security Act. |
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The suit seeks to have the defendants restore all
losses, plus interest, to the plan; offset their individual accounts, and
correct any prohibited transactions for which they are liable, including
forfeiture of any profits received from the transaction. |
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Online is a subchapter S corporation that provides
database services to magazine publishers. The 401(k) profit sharing plan
was established on June 1, 1996. The plan had 14 participants and $49,582
in assets as of December 31, 2002. |
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Employers with similar problems, who are not yet the
subject of an investigation by EBSA, may be eligible to participate in the
department’s Voluntary Fiduciary Correction Program (VFCP).
Participation in the VFCP requires employers to make workers whole but
allows them to avoid EBSA enforcement actions and civil penalties as well
as applicable excise taxes. For more information about the VFCP see
www.dol.gov/ebsa. |
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The suit was filed in the federal district court in
Minneapolis. Employers and workers can reach the Kansas City regional
office at 816.426.5131 or EBSA’s toll free number, 1.866.444.EBSA (3272)
for help with problems relating to private-sector pension and health
plans. |
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(Chao v. Online Data, Incorporated)
Civil Action No. 03-3198-DWF/SRN |
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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. |
