Labor Department Sues Indiana Trucking Company and Pension Trustee Over Employee Contributions

Archived News Release — Caution: Information may be out of date.

Indianapolis, Indiana - The U.S. Department of Labor filed a lawsuit on December 5, against Indy Truck and Trailer Service, Inc. of Indianapolis, Indiana and the trustee of its retirement plan for failing to forward pension contributions deducted from employees’ wages to the plan.

The suit alleges that Stephen A. Herr and the company violated the Employee Retirement Income Security Act (ERISA) by using workers’ pension contributions from March 7, 1997 to March 12, 1999 to pay the operating expenses of the company. The suit also alleges that the defendants failed to obtain a fidelity bond for plan years 1999 to 2001 as required by law. Indy Truck, the plan’s administrator, allegedly did not give workers a summary description of plan rules, which is also required by ERISA.

“Pension plans must be managed to benefit their participants. Their assets must be used for that purpose alone,” said Joseph Menez, director of the Cincinnati regional office of the Labor Department’s Pension and Welfare Benefits Administration (PWBA), which investigated the case.

The department’s suit seeks a court order requiring the defendants to reimburse the plan for all losses with interest, to offset Herr’s plan account, and to permanently bar Herr from serving as a fiduciary or service provider to any plan governed by ERISA. The suit also asks the court to appoint an independent fiduciary to manage the plan after Herr is removed as a trustee.

Indy Truck sponsored a retirement plan that covered as many as nine participants. The plan had cumulative assets of $72,133 as of April 30, 2001.

Joseph 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.

For more information about the VFCP see www.dol.gov/pwba.

Employers and workers can reach the Cincinnati regional office through PWBA’s Toll-Free Employee & Employer Hotline number, 1.866.275.7922, for help with any problems relating to private-sector pension and health plans.

(Chao v. Herr
Civil Action No. IP-02-1885)

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Archived News Release — Caution: Information may be out of date.