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Release Date: 06/03/2002
Release Number: V-232
Contact Name: Gloria Della
Phone Number: 202.693.8666
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Chicago, Illinois - Chicago-based IGA, Inc. has been ordered to pay $50,000 to its
employee benefit program as restitution for improperly receiving certain
administrative fees and commissions on the sale of insurance policies sold to
the program, according to a consent order and judgment obtained by the U. S.
Department of Labor on May 31. IGA also is barred from receiving
administrative fees from the program in the future. |
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“This action reaffirms our commitment to protection of the hard-earned
benefits promised by employers,” said Kenneth M. Bazar, Director of the
Chicago regional office of the Pension and Welfare Benefits Administration (PWBA). |
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A suit filed simultaneously with the judgment alleges that IGA violated the
Employee Retirement Income Security Act (ERISA) when the company received
administrative fees in excess of direct expenses, and its wholly owned
subsidiary, Grocers Insurance Agency, received commissions from the sale of
insurance policies to the program. The suit alleges that the program's
trustees, several of whom held positions as directors of IGA, approved the fee
and commission arrangements. |
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IGA, Inc. is an alliance of independent retail grocers operating throughout
the United States. The IGA program provides group life insurance, medical,
dental, vision and short-term disability benefits for 7,139 participants and had
$2,224,180 in assets as of December 31, 1997. |
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This suit, filed on May 29, 2002 in federal district court in Chicago,
Illinois,
resulted from an investigation by the Chicago regional office of PWBA into
alleged violations of ERISA. Employers and workers can contact the
regional office at 312.353.0900 or PWBA’s Toll-Free Employee & Employer
Hotline number, 1.866.275.7922,
for help with problems relating to private-sector pension and health plans. |
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(Chao v. IGA, Inc.
Civil Action No. 02-C-3792) |
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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 202.693.7775. |
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