LABOR DEPARTMENT SUES PENNSYLVANIA PLAN OFFICIALS FOR FAILING TO REMIT EMPLOYEE CONTRIBUTIONS TO 401(K) PLAN

Archived News Release — Caution: Information may be out of date.

The U. S. Department of Labor has sued now-defunct Ro-Cel Electronics Inc. of Pittsburgh and the trustees of the company’s 401(k) plan for improperly failing to timely deposit employee contributions into the plan.

Ro-Cel, an electronic alarm and security firm, created the plan in 1994 to accept voluntary employee contributions and employer contributions. Although Ro-Cel ceased operations in 1997, the plan has not been terminated.

Employee contributions funded an annuity to pay retirement benefits for as many as 40 participants. Defendants Thomas Mannering Jr. — the owner of Ro-Cel — and Donald Rosenberger served both as trustees and plan administrators of the 401(k) plan at the time of the improper actions.

According to the lawsuit, the trustees violated the Employee Retirement Income Security Act by allegedly withholding pension contributions from employee paychecks from 1994 to 1996 but failed to timely remit the money to the plan. The defendants also were alleged to have commingled plan money with the assets of the company.

The lawsuit seeks a court order removing the defendants from their positions with the plan, appointing an independent fiduciary to manage the 401(k) plan and requiring them to reimburse the plan with interest for any losses. The department also asked the court to permanently bar the trustees from serving any plan governed by ERISA, to offset their pension accounts for any losses to the plan and to redistribute the pension accounts of Mannering and Rosenberger to other participants.

This lawsuit, filed Fri., April 23, 1999, in federal district court in Pittsburgh, resulted from an investigation conducted by the Philadelphia Regional Office of the Pension and Welfare Benefits Administration. PWBA conducts investigations into alleged violations of ERISA.

(Herman v. Mannering)
Civil Action No. No. 99-82J

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Archived News Release — Caution: Information may be out of date.

Contact Name: GLORIA DELLA
Phone Number: (202) 219-8921