Labor Department Settles Lawsuit With Snyder Farm Supply And Pension Plan Trustee

Archived News Release — Caution: Information may be out of date.

A federal district court judge in Grand Rapids, Michigan, on March 28 ordered the owner of Snyder Farm Supply to purchase and maintain a fidelity bond for the company’s 401(k) plan until the latter is terminated. Defendant Thomas E. Snyder of Alto, Michigan, also was ordered to direct the plan’s custodian to distribute or roll over the accounts of plan participants.

Under the consent judgment and order obtained by the U.S. Department of Labor, Snyder, who was a fiduciary of the 401(k) plan, further agreed to pay all expenses related to the distributions, rollovers or plan termination, except for annual maintenance fees charged against each plan participant’s account.

The judgment/consent order resolves the department’s lawsuit, filed December 4, 2000, alleging that Snyder violated the Employee Retirement Income Security Act (ERISA) by failing to bond the pension plan offered to company employees. ERISA Section 412 requires fiduciaries of private sector pension plans to 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.

At various times during the plan’s five-year existence, there were as many as 44 plan participants and assets of $241,651. The plan had 14 plan participants and $44,535 in assets as of November 28, 2000.
“This case represents our commitment to protect workers by seeing that plan assets are secure from losses incurred through dishonesty or theft and that participants receive their retirement plan distributions,” said Joseph Menez, director of the Cincinnati Regional Office of the department’s Pension and Welfare Benefits Administration, which investigated the case.

(Chao v. Thomas E. Snyder and Snyder Farm Supply Inc. 401(k) Plan
Civil Action No. 1:00CV 889)

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Archived News Release — Caution: Information may be out of date.