Alabama Company To Pay $9,000 To Its 401(K) Plan Participants

Archived News Release — Caution: Information may be out of date.

The U.S. Labor Department has obtained a partial settlement in its case involving an Anniston, Ala. non-profit corporation’s 401(k) profit sharing plan.

The action will result in $9,000 being recouped for the plan and will resolve a restitution issue concerning employee contributions of $8,331.82 not remitted to the plan for the period of April 30, 1997 to June 30, 1997, as well as interest which would have accrued.

The Community Action Agency of Calhoun, Cleburne & Cherokee Counties, Inc. (CAA), the plan sponsor, was sued July 8 for failure to timely remit more than $11,000 of employee contributions to the plan. Also named in the lawsuit was Dr. Nimrod Q. Reynolds, who was the corporation’s executive director and plan trustee. Litigation against him is still pending.

CAA employees were required to contribute five percent of their compensation to the plan, which began operating in April, 1992. On Aug. 31, 1995, the plan had 95 participants and assets totaling $340,131. The department alleged the company violated the Employee Retirement Income Security Act (ERISA) when it used the funds to finance CAA’s operations

The settlement was the result of an investigation conducted by the Atlanta Regional Office of the Department Of Labor’s Pension and Welfare Benefits Administration. The settlement was entered in the federal district court in Birmingham, Ala. on Nov. 16.

Herman v. Community Action Agency of Calhoun, Cleburne & Cherokee Counties, Inc. et al
Civil Action No. CV 99-L-1747-E

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Archived News Release — Caution: Information may be out of date.

Contact Name: Sharon Morrissey
Phone Number: 202.219.8921