Pension Officials Sued For Mismanaging Illinois Pension And Welfare Plans

Archived News Release — Caution: Information may be out of date.

The U. S. Department of Labor has sued executives of the Atols Tool & Mold Corp., located in Schiller Park, Ill., for misusing assets of the company’s 401(k) and cafeteria plans to benefit the company.

The Atols Tool & Mold Corporation pension plan provides retirement benefits to 78 participants and had assets of $6,319,571 as of Jan. 31, 1999. The cafeteria plan, which covered many of the same participants, was established in 1990 to provide medical and dependent care reimbursement accounts that are funded solely through employee contributions.

The lawsuit alleges that Robert and James Atols violated their duties as members of the pension plan’s administrative committee and as fiduciaries of the cafeteria plan. According to the lawsuit, the defendants violated the Employee Retirement Income Security Act (ERISA) when they:

• failed to timely deposit employee contributions and loan repayments into the pension plan’s accounts at various times during February 1997 to April 2000;
• retained employee contributions and loan repayments with the general assets of the corporation;
• failed to pay $3,055 in participant claims with respect to the cafeteria plan despite collecting $6,666.84 in employee contributions for the period January through May 2000; and
• caused Atols Tool to retain employee contributions owed to the cafeteria plan in the general assets of the corporation without paying reimbursement claims.

As relief, the lawsuit seeks a court order to require that the defendants reimburse the plans for all losses with interest and undo any prohibited transactions with the plans. The lawsuit also seeks to offset the accounts of James Atols and Robert Atols offset for any losses suffered by the pension plan and to redistribute any offset of their accounts to the remaining participants. Finally, the lawsuit asks the court to permanently bar the Atols from serving in positions of trust to any plan governed by ERISA.

“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 Ken 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 lawsuit, filed on Nov. 14 in federal district court in Northen District of Illinois in Chicago, resulted from an investigation conducted by the Chicago Regional Office of the department's Pension and Welfare Benefits Administration into alleged violations of ERISA.

(Herman v. Atols)
Civil Action No. 00C-7157

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