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News Release

Michigan Plan Trustees Resign and Restore $597,775 To Millwrights’ Supplemental Pension and Health Plans

Archived News Release — Caution: Information may be out of date.

Detroit, Michigan - The trustees and the former administrator of the Detroit, Michigan-based Millwrights Local 1102 supplemental pension and health plans agreed to restore $597,775 to the plans. National City Bank of Cleveland, Ohio, was appointed as an independent fiduciary to manage certain participant and non-participant mortgage loans, according to a settlement reached on March 19 by the U.S. Department of Labor.

Under the judgment, the trustees were ordered to resign their positions with the plans. The court also ordered the pension plan to comply with the requirements of the Employee Retirement Income Security Act (ERISA) in any future lending or investment activity and gave National City Bank authority to manage the participant and non-participant mortgage loan portfolio of the pension plan. National City Bank exercised that authority and sold the pension plan’s participant and non-participant mortgage loan portfolio for $1,173,813.40.

The judgment resolves a suit filed August 23, 2000 against third-party administrator Automated Benefit Services, Inc. (ABS) and trustees Walter R. Mabry, Jerry D. Moore, Ronald M. Krochmalny, Keith R. Scrutton, Milford E. Woodbeck, Sr. and Roy Shields. The suit alleged the defendants violated ERISA by paying unreasonable compensation and fees to ABS, failing to prudently invest the plan’s cash assets, paying excessive fees relating to the collection of employer contributions owed to the plans, and making mortgage loans to participants which did not comply with the terms of the pension plan document.

The case resulted from an investigation conducted by the Labor Department’s Detroit District Office of the Pension and Welfare Benefit Administration (PWBA). The consent judgment was entered in the federal district court in Detroit.

“Our action reaffirms the department’s commitment to protect the benefits promised to employees,” said Paul Baumann, acting district supervisor in PWBA’s Detroit Office.

Employers and workers can reach the Detroit PWBA Office at 313.226.7450 for help with problems involving private-sector pension and health plans.

(Chao v. Walter R. Mabry, et al
Civil Action No. 00-73747 (Judge Avern Cohn))

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Archived News Release — Caution: Information may be out of date.

Agency
Employee Benefits Security Administration
Date
March 20, 2002
Release Number
160