Latham, New York, Profit-Sharing-Plan Trustee Ordered To Appoint New Trustees

Archived News Release — Caution: Information may be out of date.

The trustee of a profit sharing plan covering the employees of General Steel Fabricators, Inc. in Latham, New York, agreed to appoint a successor trustee to manage the plan under the terms of a consent order and judgment obtained by the U.S. Department of Labor.

The trustee has already restored $42,521.20 to the plan, which will be credited to the accounts of eligible participants.

A lawsuit filed simultaneously with the judgment on November 25 alleged that trustee Thomas Teichner and the company segregated the pension assets of terminated employees and imprudently invested those funds in money market investments paying a low rate of return. Plan fiduciaries are not relieved of their responsibilities under the Employee Retirement Income Security Act (ERISA), which governs plans such as this one, merely because participants have terminated their employment with the plan sponsor. Plan fiduciaries, among other things, must consider whether investments are prudent in light of the investment needs of the plan and all its participants, even those participants whose employment has been terminated.

The lawsuit also alleges that the defendants failed to hold plan assets in trust and operated the plan without a designated trustee. The General Steel Fabricators Employees Profit Sharing and Retirement fund was established on March 1, 1977 and had assets totaling $2,448,793. It covered 26 employees as of December 31, 1996.

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

The consent judgment was entered in the federal district court in Syracuse, New York, on December 4.

Herman v. Teichner Civil Action No. 98-Civ-1852

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Archived News Release — Caution: Information may be out of date.

Contact Name: Rita Ford
Phone Number: 202.219.8922