Labor Department Recovers Employee Pension Assets From Michigan Company and Owners

Archived News Release — Caution: Information may be out of date.

Flint, Michigan - Ratliff Trucking Corporation, Inc. (RTC) of Canton, Michigan, and its owners have restored $12,278.70 in losses to the company’s profit sharing plan for their failure to deposit employee contributions and employee loan payments into the plan, according to a consent judgment and order obtained by the U.S. Department of Labor on January 29, 2003.

“This action reaffirms our commitment to protect the hard-earned benefits promised by employers,” said Joseph Menez, director of the Cincinnati regional office of the Employee Benefits Security Administration (EBSA), which investigated the case.

Besides the restitution, the court action immediately removes James L. and Mary J. Ratliff from their positions as trustees of the plan and permanently bars them from serving as a fiduciary to any plan governed by federal employee benefit law. The court also named Joseph S. Moynihan and Robert H. Bosart of McDonald Investments, Inc.-A KeyCorp Company in Birmingham, Michigan to be the independent co-fiduciaries charged with terminating the plan and making distributions to eligible participants and beneficiaries. The judgment was entered in federal district court in Flint, Michigan.

The judgment resolves a lawsuit filed on July 19, 2002, alleging that RTC, the administrator, and the trustees violated the Employee Retirement Income Security Act (ERISA) by failing to remit to the plan contribution and loan payments deducted from employees’ wages from January 1998 to August 2001, and using the funds for their own benefit. The Ratliffs also allegedly failed to secure a fidelity bond for almost two years.

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. The profit sharing plan provided benefits to as many as 31 employees and had assets totaling $141,891 as of August 15, 2001.

Menez noted that employers with similar problems, who are not yet the subject of an investigation by EBSA, could be eligible to participate in the Department’s Voluntary Fiduciary Correction Program. Participation in the VFCP requires employers to make workers whole, but allows them to avoid EBSA enforcement actions and civil penalties, as well as excise taxes. For more information about the VFCP see www.dol.gov/ebsa.

Employers and workers can reach the Cincinnati regional office at 859.578.4680 or EBSA’s toll free number, 1.866.444.EBSA (3272), for help with problems relating to private-sector pension and health plans.

Chao v. Ratliff Civil Action No. 02-72960

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