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News Release
Illinois Corporation Makes Restitution To Employee Benefit Plan
Archived News Release — Caution: Information may be out of date.
Chicago, Illinois - Chicago-based IGA, Inc. has been ordered to pay $50,000 to its employee benefit program as restitution for improperly receiving certain administrative fees and commissions on the sale of insurance policies sold to the program, according to a consent order and judgment obtained by the U. S. Department of Labor on May 31. IGA also is barred from receiving administrative fees from the program in the future.
“This action reaffirms our commitment to protection of the hard-earned benefits promised by employers,” said Kenneth M. Bazar, Director of the Chicago regional office of the Pension and Welfare Benefits Administration (PWBA).
A suit filed simultaneously with the judgment alleges that IGA violated the Employee Retirement Income Security Act (ERISA) when the company received administrative fees in excess of direct expenses, and its wholly owned subsidiary, Grocers Insurance Agency, received commissions from the sale of insurance policies to the program. The suit alleges that the program's trustees, several of whom held positions as directors of IGA, approved the fee and commission arrangements.
IGA, Inc. is an alliance of independent retail grocers operating throughout the United States. The IGA program provides group life insurance, medical, dental, vision and short-term disability benefits for 7,139 participants and had $2,224,180 in assets as of December 31, 1997.
This suit, filed on May 29, 2002 in federal district court in Chicago, Illinois, resulted from an investigation by the Chicago regional office of PWBA into alleged violations of ERISA. Employers and workers can contact the regional office at 312.353.0900 or PWBA’s Toll-Free Employee & Employer Hotline number, 1.866.275.7922, for help with problems relating to private-sector pension and health plans.
(Chao v. IGA, Inc.
Civil Action No. 02-C-3792)
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Archived News Release — Caution: Information may be out of date.