Michigan Company And Officials Ordered To Restore More Than $200,000 To 401(K) Plan To Correct Plan Abuses

Archived News Release — Caution: Information may be out of date.

Financial Application Consulting Services, Inc. in Livonia, Mich., and trustees of the company’s 401(k) plan were ordered to collectively restore $222,503.86 to the plan in a consent order and judgment obtained by the U. S. Department of Labor.

The judgment resolves a lawsuit filed on July 1, 1999 alleging that the company and trustees Steven Kandt, Stephen Rupe and Roger Jelsma violated the Employee Retirement Income Security Act (ERISA) by failing to promptly remit 401(k) contributions deducted from employees’ paychecks into the plan’s investment accounts for the period Dec. 31, 1988 to Dec. 31, 1997.

The lawsuit also alleged that the defendants failed to remit matching employer contributions, to collect employer contributions owed to the plan, and to collect payment on outstanding participant loans from the plan totaling more than $72,000, a prohibited transaction under ERISA.

The judgment obtained by the department also stipulates that: the money restored to the plan be credited to the pension accounts of all participants, excluding the defendants; the court appoint an independent fiduciary to manage the plan; and the defendant trustees be permanently barred from serving or acting as fiduciaries or service providers to any ERISA-covered plan.

The 401(k) plan provided retirement, death and disability benefits to 66 employees. As of December 31, 1997, the plan had $937,684 in assets.

The court action resulted from an investigation conducted by the Cincinnati Regional Office of the department’s Pension and Welfare Benefits Administration into violations of ERISA. The consent order and judgment were entered on July 8, 1999 in the federal district court in Detroit, Mich.

Herman v. Financial Applications
Consultants Services, Inc.
Civil Action No. 99-73316

U.S. Department of Labor news releases are accessible on the Internet. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the Central Office for Assistive Services and Technology. Please specify which news release when placing your request. Call 202.693.7773 or TTY 202.693.7755.

Archived News Release — Caution: Information may be out of date.

Contact Name: RITA FORD
Phone Number: 202.219.8921
Contact Name: Joseph R. Menez
Phone Number: 606.578.4680