Labor Department Recovers Assets for North Carolina Pension Participants

Archived News Release — Caution: Information may be out of date.

Atlanta, Georgia - Commercial Builders, Inc. of Rocky Mount, North Carolina, its owner, and a pension trustee agreed to pay $95,000 in lost earnings to the plan and to hire an independent third party administrator to distribute the restored assets to plan participants, according to settlement agreements obtained on November 5 by the U.S. Department of Labor.

Under the settlement, defendants Michael V. Barnhill, Sr. and former trustee Paul C. French Jr. are permanently barred from serving in positions of trust to any plan governed by the Employee Retirement Income Security Act (ERISA). Former assistant trustee Ken R. Ratzlaff is barred from serving in such positions for a period of 10 years. The settlement does allow Barnhill to take action to allocate and distribute to participants the assets restored to the plan.

Commercial Builders, Inc. (CBI), which was solely owned by Barnhill, was the pension plan administrator. The plan required CBI to make mandatory annual contributions of 5% of the compensation of eligible participants. As of December 31, 1990, the plan covered 86 participants and had $826,763 in assets. As of January 1, 1994, the company had ceased making contributions to the plan. Subsequently, the plan's assets were distributed to participants.

A suit filed simultaneously with the settlement alleges that CBI, Barnhill, French and Ratzlaff violated ERISA by using plan assets to benefit themselves and affiliated companies. The suit alleges the defendants made numerous prohibited loans from the plan totaling $476,034.88 to companies owned by them. They also allegedly failed to recover a shortfall in plan contributions which resulted when the company contributed land valued at $51,385 to satisfy the company’s 1990 mandatory contribution of $73,172.

“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 Howard Marsh, director of the Atlanta Office of the department’s Pension and Welfare Benefits Administration (PWBA). “Employers and workers can reach us at 404.562.2156 for help with any problems relating to private-sector pension and health plans.”

The court actions resulted from an investigation conducted by the Atlanta Regional Office of PWBA into alleged violations of ERISA.

(Chao v. Barnhill
Civil Action No. 4:01-cv-153-H4)

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