Bethesda, Md Pension Administrator Sued For Failure To Make Pension Plan Contributions

Archived News Release — Caution: Information may be out of date.

The U. S. Department of Labor has sued the plan administrator to two pension plans of Bethesda-based Information Systems and Networks Corp. for failure to collect $160,000 in required employer contributions owed to the company’s pension plan and to timely allocate interest on delinquent employee contributions to the accounts of profit sharing plan participants.

According to the lawsuit, ISN made its 1995 contribution to the pension plan seven months late and that contribution was deficient by $70,000. The department also contends ISN’s 1996 contribution to the pension plan was deficient by $90,000.

The lawsuit alleges that Roma Malkani violated her duties as chairperson of the Pension Plan Committee of ISN. Malkani, who is also the sole owner and president of ISN, allegedly violated the Employee Retirement Income Security Act (ERISA) by failing to:

• ensure that ISN made full and timely contributions to the pension plan in 1995 and 1996;
• allocate contributions and forfeitures to the accounts of participants covered by the pension plan in 1995 and 1996; and
• timely allocate $24,000 in interest on delinquent employee contributions to the accounts of profit sharing plan participants based on an earlier investigation conducted by the Labor Department.

ISN deposited the interest into the profit sharing plan’s trust fund in January 1998 but Malkani allegedly failed to allocate the money to participants’ accounts until December 1999 despite repeated inquiries from PWBA to do so.

The lawsuit seeks a court order to require that Malkani restore all losses to the pension plan, remove her from the position as plan administrator and permanently bar her from serving in a position of trust to any ERISA-covered plan except one which includes only Malkani and immediate family members. The lawsuit also asks the court to appoint an independent fiduciary to manage and administer the assets of the plans.

ISN is an engineering and systems integration services firm which sponsors the pension and profit sharing plans. The pension plan covered 398 participants in 1996 and is funded primarily by employer contributions. The profit sharing plan is funded by employer and employee contributions.

This case resulted from an investigation conducted by the Washington, D.C. District Office of the department’s Pension and Welfare Benefits Administration (PWBA) into alleged violations of ERISA. The lawsuit was filed on Tues., Nov. 28, 2000 in federal district court in Greenbelt, Md.

"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 Mabel Capolongo, director of PWBA’s Philadelphia Regional Office. "Employers and workers can reach us at (215) 861-5300 for help with any problems relating to private-sector pension and health plans."

(Herman v. Malkani)
Civil Action No. S 00-3491

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