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News Release
Labor Department Sues Computer America Training Centers’ 401(k) Trustee
Archived News Release — Caution: Information may be out of date.
Chicago, Illinois - The U.S. Department of Labor has sued the trustee of the Roselle, Illinois-based Computer America Training Centers, Inc. 401(k) plan for failing to forward $24,011.69 in employee contributions to the plan.
“This action reaffirms our commitment to protect the hard-earned benefits promised by employers," said Kenneth Bazar, director of the department’s Chicago regional office of the Pension and Welfare Benefits Administration, which investigated the case.
The department’s complaint, filed May 30 in federal district court in Chicago, alleged that Christina Nyborg, the company’s president and plan trustee, failed to forward to the plan contributions withheld from employees’ paychecks and used the money to benefit the company. She also allegedly failed to secure a proper bond and violated various reporting and disclosure requirements of the Employee Retirement Income Security Act (ERISA).
In its lawsuit, the department is asking that Nyborg be required to repay the plan the unforwarded paycheck deductions, plus interest, and to waive her individual account in the plan to be reallocated to all other plan participants and beneficiaries. The court is also being asked to require Nyborg to terminate the plan, distribute the assets to participants, file appropriate termination papers with the Labor Department and the Internal Revenue Service, and obtain a fidelity bond as required by federal employee benefit law.
The company, which ceased operations in November 2001, filed for Chapter 7 bankruptcy protection December 17, 2001 in the U.S. Bankruptcy Court for the Northern District of Illinois.
The plan, adopted in May 2001, had 35 participants and $28,685 in assets, including the unremitted employee contributions, as of October 31, 2000.
The department’s Voluntary Fiduciary Correction Program (VFCP) allows plans to correct failures in forwarding contributions withheld from employees’ paychecks and certain other ERISA violations. Eligible applicants who properly correct transactions under the program will not be subject to enforcement action or liable for civil penalties. Excise tax liability under section 4975 of the Internal Revenue Code is also eliminated for certain transactions.
Employers and workers may contact the regional office at 312.353.0900 or PWBA’s Toll-Free Hotline number, 1.866.275.7922 for help with questions about private-sector pension and health plans.
(Chao v. Computer America Training Centers, Inc.
Civil Action No. 02 C 3845)
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Archived News Release — Caution: Information may be out of date.