Aurora Pension Trustees Sued over Timely Deposit of 401(k) Contributions

Archived News Release — Caution: Information may be out of date.

The U.S. Department of Labor today sued trustees of the Preferred Mold & Engineering, Inc. 401(k) plan of Aurora, Colorado, for failure to timely deposit $4,835 in contributions withheld from employees paychecks.
Preferred Mold & Engineering manufactured plastic injection molds used in the formation of steel parts. The company was co-owned by the brothers Mark and James Ziemer. The Ziemers also were trustees of the plan sponsored for 20 participants. As of March 1999, the plan had $139,311 in assets held as a group annuity contract.

According to the lawsuit, the money was withheld from employees’ paychecks over the period November 1, 1998 to December 31, 1998. The department alleges that trustees James Ziemer and Mark Ziemer violated the Employee Retirement Income Security Act (ERISA) when they failed to take steps to ensure that employee contributions were transferred to the 401(k) plan.

The lawsuit seeks a court order to require that the trustees restore all losses with interest to the plan or its participants, to undo any prohibited transactions and to terminate the plan after distribution of all assets to participants.

The lawsuit, filed on January 22 in federal District Court for the District of Colorado, resulted from an investigation conducted by the Kansas City Regional Office of the department’s Pension and Welfare Benefits Administration into alleged violations of 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 Gregory Egan, director of PWBA’s Kansas City Regional Office. "Employers and workers can reach us at 816.426.5131 for help with any problems relating to private-sector pension and health plans."

(Herman v. Ziemer
Civil Action No. 01-D-0115)

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Archived News Release — Caution: Information may be out of date.