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Fiduciaries to restore $19K to Manchester, New Hampshire, 401(k) plan
Date of Action: Aug. 5, 2015
Type of Action: Consent Judgment and Order
Names of Defendants: American Hydraulics Corp., Kevin M. Lynch and Janette M. Rioux, individually and in their capacities as fiduciaries of the AHC Corp. 401(k) Plan
Allegations: In 2006, Manchester hydraulics equipment service company American Hydraulics Corp. established the AHC Corp. 401(k) Plan to provide retirement benefits for plan participants and their beneficiaries. It is an elective wage deferral plan in which employee contributions are deducted from their salary and remitted to the plan for investment in accordance with each participant’s election. Employees of American Hydraulics Corp. can also take loans from the plan.
American Hydraulics Corp. is the plan sponsor; Kevin M. Lynch is the president and director of the company and Janette M. Rioux was the company’s general manager. The company and both Lynch and Rioux are fiduciaries of the 401(k) plan. The Employee Retirement Income Security Act requires that they forward the withheld contributions and loan repayments to the plan.
An investigation by the Labor Department’s Employee Benefits Security Administration found that, beginning in January 2011 until at least February 2014, certain employee contributions and loan repayments were not remitted to the plan in a timely manner, and other contributions and loan repayments were not remitted at all. The investigation also found that Lynch and Rioux knew that certain employee contributions had not been properly remitted to the plan. Nevertheless, the company continued to withhold contributions and loan repayments from participants’ pay. The Labor Department filed a complaint in U.S. District Court against the defendants on April 1, 2015.
Resolution: The Labor Department has obtained a judgment ordering the defendants to restore $19,853.96 to the plan -- $18,506.79 in contributions and loan repayments plus $1,347.17 in lost opportunity costs. They will ensure that non-fiduciary plan participants receive the correct amounts due to them as well as obtain required fidelity bond or bonds for the plan. Defendant Rioux is permanently prohibited from serving as a fiduciary to any ERISA-covered plan, while defendant Lynch is enjoined from doing so for a period of five years. He must also take a minimum of eight hours of fiduciary education and provide a certificate of completion to the Labor Department.
Court: U.S. District Court for the District of New Hampshire
Docket Number: 1:15-cv-00111
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