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Detroit, Michigan - The U.S. Department of Labor
has obtained a consent judgment restoring $17,928.30 to two Gladstone,
Michigan-based Lakeside Machine, Inc. profit sharing & salary deferral
plans – one for salaried employees and the other a collectively
bargained employee plan.
“The department will act when plan fiduciaries fail
to carry out their duty to protect the retirement plan assets held on
behalf of participants,” said Joseph Menez, director of the department’s
Cincinnati regional office of the Employee Benefits Security
Administration (EBSA).
The settlement resolves a lawsuit filed by the Labor
Department alleging that Paul D. Paulson, Jr.-- president, CEO and chief
financial officer of the former Lakeside Machine Inc.-- failed to remit
employee contributions to the profit sharing and salary deferral plans at
various times between January 2000 and November 2002. Paulson also
allegedly commingled the employee contributions with the assets of the
company in violation of the Employee Retirement Income Security Act. The
judgment permanently bars plan trustee Paulson from serving as a fiduciary
or service provider to any employee benefit plans governed by ERISA.
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 program requires employers to correct violations of
the law but allows them to avoid EBSA enforcement actions and civil
penalties as well as any applicable excise taxes. For more information
about the VFCP, see www.dol.gov/ebsa.
The suit, filed in federal district court in Michigan,
resulted from an investigation conducted by the Detroit district office of
EBSA’s Cincinnati regional office. Employers and workers can reach the
Cincinnati office at 859.578.4680 or through EBSA’s toll-free number,
1.866.444.EBSA (3272), for help with problems relating to private-sector
retirement and health plans. In fiscal year 2004, EBSA achieved record
monetary results of $3.1 billion related to the pension, 401(k), health
and other benefits of millions of American workers and their families.
Chao v. Paulson
Civil Action No. 2:05-ev-33 |
