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Atlanta, Georgia - The U.S. Department of Labor
has sued bankrupt Terry Manufacturing Company Inc. of Roanoke, Alabama,
and two company officers and trustees of its 401(k) plan, for failing to
remit and timely forward approximately $165,000 in employee contributions
and interest to the plan.
“Trustees of a 401(k) plan have a responsibility to
ensure that the assets of the plan are used solely to benefit
participants,” said Ann L. Combs, assistant secretary of labor for
employee benefits security. “One of the most important responsibilities
is putting money from workers’ wages into their 401(k) accounts on time.”
Filed in U.S. District Court in Montgomery, the suit
alleges that the company and former plan trustees Roy Terry and Rudolph
Terry, violated the Employee Retirement Income Security Act (ERISA)
between January 1, 2001, and July 7, 2003. The suit charges that the
defendants failed to separate some $140,000 in employee contributions from
the assets of the company and to pay interest on any delinquent
contributions, resulting in total losses to the plan of approximately
$165,000.
The suit asks the court to require the defendants to
restore all losses with interest and to permanently bar them from serving
as fiduciaries for any plan covered by ERISA.
Prior to filing for bankruptcy in July 2003, Terry
Manufacturing produced uniforms and other products. The 401(k) plan,
sponsored by the company, had 350 participants and assets of approximately
$133,000 as of June 2004.
Employers with similar problems who are not yet the
subject of an investigation by the Employee Benefits Security
Administration (EBSA) may be eligible to participate in the department’s
Voluntary Fiduciary Correction Program (VFCP). Participation in the
program requires employers to correct all violations 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 followed an investigation by EBSA’s Atlanta
regional office. Employers and workers can contact the regional office at
404.562.2156 or EBSA’s toll-free number, 1.866.444.EBSA (3272), for help
with problems relating to private-sector pension 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. Terry Manufacturing Company, Inc.)
Civil Action No. 3:05cv 764 |
