U.S. Labor Department Sues Neupak Inc. to Protect Contributions and Loan Repayments to St. Paul 401(k) Plan

Archived News Release — Caution: Information may be out of date.

Minneapolis, Minnesota - The U.S. Department of Labor filed suit today against Neupak Inc., its majority shareholder, and its 401(k) plan fiduciaries to recover employee contributions and loan repayments that they failed to forward to the workers’ 401(k) plan.

The lawsuit, filed in the United States District Court of Minnesota, alleges that Neupak Inc. owner/fiduciary Terrence Roberts, and fiduciaries Jason Roberts and Nicholas Roberts violated the Employee Retirement Income Security Act (ERISA). The defendants allegedly failed to forward 401(k) plan contributions and loan repayments withheld from seven employees’ paychecks for specific periods during October 2003 through May 2004. The company was located in St. Paul at the time of the alleged violations.

“The law requires plan fiduciaries to act responsibly in managing money set aside for retirement plans for the benefit of workers and their families,” said Steven Eischen, director of the Employee Benefits Security Administration’s (EBSA) Kansas City regional office. The Kansas City regional office investigated the case.

The suit seeks to require the defendants to repay all contributions and restore all losses with interest owed to the plan. It also asks the court to permanently bar the Roberts from serving as fiduciaries to any plan 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 VFCP requires employers to correct any 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.

Employers and workers with questions or concerns regarding their private-sector pension and health plans can contact the EBSA regional office in Kansas City at 816.426.5131 or EBSA’s toll free number, 1.866.444.EBSA (3272). In fiscal year 2005, EBSA achieved monetary results of $1.7 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

(Chao v. Neupak Inc. et al)
Civil Action No. 0:06-cv-2612

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Archived News Release — Caution: Information may be out of date.

Contact Name: Brad Mitchell
Phone Number: 312.353.6976