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US Labor Department obtains consent judgment to recover more than $500K for 401(k) plan of Largo, Maryland, defense contractor
Date of Action: Dec. 3, 2015
Type of Action: Consent judgment
Name(s) of Defendant(s): NW Systems Inc., NW Systems Inc. 401(k) profit-sharing plan and trust, and Nathan Williams
Allegations: Based on an investigation conducted by the U.S. Department of Labor’s Employee Benefits Security Administration, the Secretary of Labor filed a complaint on Jan. 7, 2015, alleging the following:
NW Systems Inc. established the plan in 1999 to provide benefits to its employees in the event of retirement, death or disability, as well as upon termination of employment. The plan was funded by elective employee contributions and employer contributions. From Jan. 1, 2009 through December 2012, the defendants violated the Employee Retirement Income Security Act of 1974 by failing to remit over $390,000 in employee and employer contributions to the plan.
Resolution: The District Court of Maryland approved two separately filed consent judgments filed on October 30 and November 9, resolving the Secretary’s claims against NW Systems Inc. and Nathan Williams regarding the NW Systems Inc. 401(k) plan.
Through the consent judgments, the defendants agreed they breached their fiduciary duties under ERISA and caused prohibited transactions. To restore losses to the plan, including lost earnings, NW Systems Inc. agreed to a multi-year payment plan and Williams agreed to pay a percentage of his wages and other earnings. Once both defendants have fulfilled their agreements, they will have restored at least $500,000 in unremitted contributions and associated lost earnings to the plan.
In a prior action by the Secretary in February 2013, Williams and NW Systems Inc. agreed to be permanently enjoined from any and all fiduciary positions with respect to the plan, and to appoint an independent fiduciary to the plan.
Court: United States District Court for the District of Maryland
Docket Number: 8:15-cv-00056-GJH
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