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Release Date: 11/15/2004
Release Number: 04-2335-CHI
Contact Name: Gloria Della
Phone Number: 202.693.8664
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Minneapolis, Minnesota - The U.S. Department of
Labor sued the former trustee of the 401(k) plan of defunct Red Wing
Foods, Inc. in Minneapolis, Minnesota, for failure to forward to the plan
all contributions and loan repayments deducted from employees’ paychecks
and retaining those assets in the corporate account of the company. |
“The
law states that plan fiduciaries have a responsibility to manage the money
set aside in retirement plans for the benefit of employees and their
families,” said Steven Eischen, director of the department’s Kansas
City regional office of the Employee Benefits Security Administration (EBSA).
“Our legal action is designed to restore money to pay future benefits to
these plan participants.” |
The
lawsuit alleges that trustee David A. Thompson violated the Employee
Retirement Income Security Act when he failed to remit the full amount of
employee contributions and loan repayments to the plan during the period
January 17 and March 28, 2003. In addition, he commingled plan assets with
those of the company and used the money for his own benefit. |
The
suit seeks to require Thompson to restore to the plan all losses with
interest and correct any transactions prohibited by law. Red Wing served
as the plan administrator until it ceased business operations in June
2003. Thompson, the sole owner of the grocery wholesaler, terminated the
plan on May 15, 2003. |
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 make workers whole 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. |
The
case, filed in federal district court in Minneapolis, resulted from an
investigation conducted by the EBSA’s Kansas City regional office. In
fiscal year 2004, EBSA achieved record monetary results of $3.1 billion
related to the pension, 401(k), health and other benefits of millions of
American workers and their families. Employers and workers can contact the
regional office at 816.426.5131 or EBSA’s toll free number,
1.866.444.EBSA (3272), for help with problems relating to private-sector
pension and health plans. |
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(Chao v. Thompson)
Civil Action No. 04-CV-4646 |
U.S.
Labor Department news releases are accessible on the Internet at
www.dol.gov. The information in this news release will be made available
in alternate format upon request (large print, Braille, audio tape or
disc) from the COAST office. Please specify which news release when
placing your request at 202.693.7765 or TTY 202.693.7755. The U.S.
Department of Labor is committed to providing America's employers and
employees with easy access to understandable information on how to comply
with its laws and regulations. For more information, please visit
www.dol.gov/compliance. |
