Indiana Trucking Company and Retirement Plan Trustee to Make Restitution for Misusing Employee Benefits

Archived News Release — Caution: Information may be out of date.

Indianapolis, Indiana - The Department of Labor obtained a consent order and judgment on February 19, requiring Indy Truck and Trailer Service, Inc. of Indianapolis, Indiana, and the trustee of its retirement plan to restore $10,157.90 to the plan for failure to forward employee contributions to the plan.

Trustee Stephen A. Herr also was permanently barred from serving any employee benefit plan governed by the Employee Retirement Income Security Act (ERISA), and agreed to relinquish his pension account to repay losses to the other plan participants.

“The flagrant misuse of pension assets to subsidize corporate activities jeopardizes the retirement income of workers and will not be tolerated,” said Joseph Menez, director of the Cincinnati regional office of the Labor Department’s Employee Benefits Security Administration (EBSA), which investigated the case.

The Labor Department filed a suit in December 2002 against Herr and the company as plan administrator for allegedly misusing the workers’ contributions from March 1997 to March 1999 to pay corporate operating expenses. The suit also alleged that the defendants failed to obtain a fidelity bond for plan years 1999 to 2001, and that Indy Truck did not give workers a summary description of plan rules.

Indy Truck sponsored the retirement plan that covered as many as nine participants. The plan held 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 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.

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

(Chao v. Herr)
Civil Action No. 1:02-CV-1885

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Archived News Release — Caution: Information may be out of date.