Please note: As of January 20, 2021, information in some news releases may be out of date or not reflect current policies.
News Release
Iowa Corporation and Co-Owner Ordered to Restore Funds to 401(k) Plan
Archived News Release — Caution: Information may be out of date.
Kansas City, Missouri - In a judgment obtained on September 24 by the U.S. Department of Labor, an Iowa City, Iowa, automotive corporation and its co-owner were ordered to restore $14,538 to the corporation’s 401(k) profit sharing plan for violating federal pension law by failing to forward contributions to the plan.
“The Department of Labor is committed to protecting the benefits promised by employers,” said Gregory Egan, director of the department’s Kansas City regional office of the Pension and Welfare Benefits Administration.
A suit filed simultaneously with the judgment on August 2, names as defendants Warren Automotive, Inc. and Warren Birely, the plan administrator and trustee, respectively, alleging that from October 1998 through December 2000, they failed to timely deposit contributions withheld from employees’ paychecks, and in 2001 failed to submit employer matching contributions to the plan.
The defendants violated the Employee Retirement Income Security Act (ERISA) by failing to act solely in the interest of the participants, failing to hold the plan assets in trust, and engaging in transactions that constituted a conflict of interest.
Warren Automotive, Inc., an auto body repair shop founded in 1978, specializes in restoration of antique cars. The 401(k) profit sharing plan, established in May 1998, had 10 participants and was reduced to five by December 2000.
Regional Director Gregory Egan noted that employers with similar problems, who are not yet the subject of an investigation by EBSA, 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 EBSA enforcement actions and civil penalties as well as applicable excise taxes.
For more information about the VFCP see www.dol.gov/ebsa.
The judgment resulted from an investigation conducted by EBSA’s Kansas City regional office into alleged violations of ERISA. Employers and workers can reach the regional office at 816.426.5131 or EBSA’s Toll-Free Employee & Employer Hotline number, 1.866.275.7922, for help with problems relating to private-sector pension and health plans.
The judgment was entered in the federal district court in Des Moines, Iowa.
(Chao v. Birely
Civil Action No. 3 02CV70087)
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Archived News Release — Caution: Information may be out of date.