Maryland Trustees are Removed from Serving an ERISA Plan under Consent Judgments

Archived News Release — Caution: Information may be out of date.

Philadelphia, Pennsylvania - The trustees of the 401(k) profit sharing plan for GNM and Associates, Inc. in Silver Spring, Maryland, were removed from their positions, in consent judgments obtained on May 10, 2001, by the U.S. Department of Labor.

In addition to the trustees’ removal, one consent judgment stipulates that trustee William L. Allen Jr. must pay the plan $6,714 and forfeit any remaining account balance in the plan to be distributed among the plan’s participants. An additional $5,786 is being paid to the plan out of the remaining assets of GNM, which is in bankruptcy. A second consent judgment permanently bars trustee Elizabeth Bateman from serving any plan governed by the federal pension law, and appoints Fred S. Shapiro & Associates, Inc. as the independent fiduciary to oversee the assets of the plan and to efficiently terminate it.

The actions resulted from a lawsuit filed by the department against Allen and Bateman in January 2001 that alleged they failed to timely transmit employees’ contributions to the plan and used the funds for the corporation’s operating expenses in violation of the Employee Retirement Income Security Act (ERISA).

GNM was an engineering firm that established a 401(k) plan to allow its employees to defer a portion of their income and have it deposited in the plan on their behalf.

“Our goal is to ensure that consumers know that the department is committed to protecting the benefits promised by employers,” said Mabel Capolongo, Philadelphia regional director of the Pension and Welfare Benefits Administration. “Employers and workers can reach us at 301.713.2000 for help with any problems relating to private-sector pension and health plans.”

The consent judgments resulted from an investigation by the Washington District Office of PWBA into violations of ERISA. They were entered in the federal district court in Greenbelt, Maryland.

(Chao v. Bateman
Civil Action No. AW-01-0055)

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Archived News Release — Caution: Information may be out of date.