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Release Date: 08/30/2001
Release
Number: 01-144
Contact Name: Sharon Morrissey
Phone Number: 202.219.8921 |
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The U.S. Department of Labor negotiated a
settlement August 21 with the Continental Vinyl Window Co., Inc. (CVW) of
LaVergne, Tennessee and a trustee of its 401(k) profit sharing plan for failing to
forward employee contributions and for making improper loans and transfers from
the 401(k) plan. |
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Under the settlement terms, trustee and company
president Dale P. Schneider was permanently barred from serving or acting as a
fiduciary to any employee benefit plan subject to the Employee Retirement
Income Security Act (ERISA). He also agreed to:
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Offset his own plan benefits against $10,040.65, representing
lost earnings to the plan, and to redistribute the funds to plan participants
on a prorated basis
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To resolve both his outstanding participant loan of $42,500 and
his prior distribution from the plan of $102,600 as well as previous
distributions from the plan, respectively, of $67,400 and $72,000, to company
officials Jeffrey Schneider and Leroy Gillmer by filing required IRS Form 1099s
for these distributions.
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Also, the company agreed to repay the plan
$15,754.41, representing un-remitted employee contributions to the plan, and to
take steps necessary to terminate the plan and distribute its assets to
participants and beneficiaries. CVW, which manufactures vinyl replacement
windows and room enclosures, established the 401(k) plan in January 1989,
permitting employees to defer up to 15 percent of their compensation before
taxes to the plan. As of December 31, 1996, the plan had 66 participants and
$485,994 in assets. The company filed for bankruptcy reorganization on
November 16,
1999. |
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The department’s lawsuit, filed August 15,
alleged that the corporation, doing business as Continental Vinyl Products,
Co., Inc. and Schneider violated ERISA by:
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Approving a $42,500 personal loan from the 401(k) plan to
himself and not making an installment payment on the loan since August
1996
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Causing the plan to pay $4,938.77 in surrender charges on
distributions from the 401(k) plan
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Transferring $242,000 of 401(k) assets to the account of CVW to
pay the daily operational expenses of the corporation.
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The department’s settlement, entered August 21
in the federal district court in Nashville, Tennessee, resulted from an
investigation by the Atlanta Regional Office of the Pension and Welfare
Benefits Administration into violations of ERISA. |
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“Our goal is to ensure that consumers know
the department is only a phone call away to protect benefits promised by
employers,” said Howard Marsh, director of the Atlanta office.
“Employers and workers can reach us at 404.562.2156 for help with any
problems relating to private-sector pension, health and other benefit
plans.” |
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(Chao v. Continental Vinyl Window Co., Inc.
Civil Action No. 3:01-1216) |
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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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