Labor Department Sues Michigan Company and Owners for Misusing Plan Assets

Archived News Release — Caution: Information may be out of date.

Cincinnati, Ohio - The U.S. Department of Labor sued Ratliff Trucking Corporation, Inc., (RTC) of Canton, Michigan, and owners James L. Ratliff and Mary J. Ratliff on July 19 for failure to deposit $10,385 in employee contributions and employee loan payments into the corporation’s profit sharing plan.

“This lawsuit demonstrates the department’s commitment to protect the benefits of America’s workers,” said Joseph Menez, director of the Cincinnati regional office of the Pension and Welfare Benefits Administration (PWBA), which investigated the case.

Filed in federal district court in Detroit, the suit alleges that RTC, the administrator, and James L. and Mary J. Ratliff, the trustees of the corporation’s profit sharing plan, violated the Employee Retirement Income Security Act (ERISA) by failing to remit employee contributions and employee loan payments from January 1998 through August 2001, and using the funds for their own benefit. The Ratliffs also allegedly failed to secure a fidelity bond for almost two years.

The suit seeks to restore to the plan all losses plus lost opportunity costs; offset the Ratliffs’ plan accounts; permanently bar them from serving any employee benefit plan covered under ERISA; and appoint an independent fiduciary to oversee the plan.
Incorporated in 1976, RTC provided for the transport of products primarily for the auto industry, with Ford Motor Company as their primary customer. RTC operated throughout the eastern United States and Canada through trucking terminals located in Canton, Michigan, and Nashville, Tennessee, but closed its facilities in December 2001. It established the profit sharing plan on January 1, 1990, and in 1998 provided benefits to 31 employees. As of August 15, 2001, the plan had assets totaling $141,891.

Menez noted that employers with similar problems, who are not yet the subject of an investigation by PWBA, may be eligible to participate in the Department’s Voluntary Fiduciary Correction Program (VFCP). Participation in the VFCP requires employers to make workers whole, but allows them to avoid PWBA enforcement actions and civil penalties as well as any applicable excise taxes.

“The VFCP gives plan sponsors a way to come into compliance with ERISA by restoring workers’ benefits while avoiding an investigation by PWBA,” said Menez. “It protects workers’ health and retirement benefits and allows us to focus our resources on those who seek to avoid compliance.”

Employers and workers can contact the Cincinnati Regional Office at 859.578.4680 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. Ratliff et al
Civil Action No. 02-72960)

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