Labor Department Recovers Retirement Benefits For Participants Of Milwaukee 401(K) Plan

Archived News Release — Caution: Information may be out of date.

The U.S. Department of Labor has obtained a consent order and judgment requiring the former owner of Frame Engineering, Inc., of Milwaukee, Wis., to restore $28,457 to participants of the company’s defunct 401(k) plan and appointing an independent custodian to oversee distribution of the money.

M. Larry Lefoldt was appointed as the independent custodian of the trust account designated to receive the restored assets.

The consent order also requires Randy Frame and Frank Egan to waive their right to any money restored to the plan and to redistribute that money to the accounts of plan participants other than themselves. Frame also has agreed to pay a civil penalty on the amount restored to the participants.

The consent order resolved a lawsuit simultaneously filed on March 27, 2000, alleging that Frame and Egan violated their fiduciary duties under the Employee Retirement Income Security Act (ERISA). Frame was the president and majority owner of the company and Egan was the corporate vice president and controller.

According to the lawsuit, the defendants failed to timely remit $28,457.82 in voluntary employee contributions and loan payments withheld from employees’ paychecks to the plan’s investment account over the period from May to October 1993. The lawsuit also alleged that the defendants allowed the money to be retained as corporate assets of Frame Engineering.

The Frame Engineering Company, Inc. 401(k) Plan, which covered as many as 50 employees, was terminated in 1995. The company was placed in receivership in state court in 1993.

“Our goal is to assure that consumers know that the department is only a phone call away to help protect the benefits promised by employers," said Kenneth Bazar, director of the Chicago Regional Office of the Labor Department’s Pension and Welfare Benefits Administration (PWBA). “Employers and workers can reach us at (312) 353-0900 for help with any problems relating to private-sector pension and health plans.”

The case resulted from an investigation conducted by the Chicago Regional Office of PWBA into alleged violations of the Employee Retirement Income Security Act. The consent order and judgment was entered on March 31, 2000, in federal district court for the Eastern District in Milwaukee, Wis.

Herman v. Frame
Civil Action No. 00-C-0436

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