Labor Department Sues Ohio Corporation And Plan Trustees For Illegally Withholding Employee Contributions

Archived News Release — Caution: Information may be out of date.

The U.S. Department of Labor has filed a lawsuit against a Columbus, Oh., corporation and its plan trustees for failing to promptly remit the money withheld from employees' paychecks into the 401(k) plan's investment accounts.

Named in the lawsuit were Buckeye Technical Services, Inc. and trustees Myron G. Place and William R. Kugel, Jr. Also named as a defendant was the Buckeye Technical Services, Inc. Retirement Plan. The plan was established in 1992 to provide benefits to employees of Buckeye upon retirement or in the event of undue financial hardship.

The department's lawsuit alleged from October 1992 through June 30, 1995, Buckeye withheld from employees' pay voluntary plan contributions and failed to promptly remit the amounts into the plan's investment accounts. The money allegedly was held by the company in its own general assets. The trustees also were alleged to have failed to ensure that the voluntary employee contributions withheld were deposited in the plans's investment accounts.

The department asks that defendants Place and Kugel be permanently barred from serving as fiduciaries to any employee benefit plan covered under the Employee Retirement Income Security Act (ERISA); that they correct the prohibited transactions in which they engaged and that both the corporation and the trustees restore to the plan any losses, plus interest, resulting from the fiduciary breaches for which they are liable.

The civil case represents on-going efforts on the part of the department to eliminate misuse of employee contributions with respect to employee benefit plans.

The lawsuit resulted from an investigation by the Cincinnati Regional Office of the Pension and Welfare Benefits Administration into violations of ERISA.

The lawsuit was filed in the federal district court in (Columbus Ohio) on Feb. 3.

Herman v. Buckeye Technical Services, Inc.
Civil Action No. C2 98-0140

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Archived News Release — Caution: Information may be out of date.

Contact Name: RITA FORD
Phone Number: 202.219.8921