Lack Of Fidelity Bond Precipitates Labor Department Lawsuit With Snyder Farm Supply And Pension Plan Trustee

Archived News Release — Caution: Information may be out of date.

The U.S. Department of Labor has sued Alto, Mich.-based Snyder Farm Supply and its majority owner Thomas E. Snyder, who also administered the Snyder Farm Supply 401(k) pension plan, for their failure to bond the pension plan offered to the company’s employees.

The lawsuit, filed today in federal district court in Grand Rapids, cites the defendants’ continuing fiduciary violation of the Employee Retirement Income Security Act of 1974 (ERISA) for failing to maintaining a fidelity bond. ERISA Section 412 requires that fiduciaries of private sector pension plans obtain a bond in the minimum amount of 10 percent of the amount of plan funds handled, to protect employee benefit plans against loss caused by acts of fraud or dishonesty.

The department is seeking to have the federal court (1) order to defendants to obtain and maintain a fidelity bond to meet the requirements of ERISA Section 412; and (2) remove Thomas Snyder as the plan administrator and be replaced by an independent trustee, who will subsequently administer and/or terminate the plan.

At various times during the plan’s five-year existence, there have been as many as 44 plan participants and assets of $241,651. Most recently, the plan had 14 plan participants and $44,535 in assets as of Nov. 28, 2000.

The complaint is a result of an investigation by the Cincinnati Regional Office of the department’s Pension and Welfare Benefits Administration, which oversees federal pension law.

(Herman v. Thomas E. Snyder and Snyder Farm Supply Inc. 401(k) Plan
Civil Action # 1:00CV 887

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 202.693.7775.

Archived News Release — Caution: Information may be out of date.