Alexandria, Minnesota SIMPLE IRA Plan Official Agrees To Repay Plan for Delinquent Contributions

Archived News Release — Caution: Information may be out of date.

Minneapolis, Minnesota - The president of Double A Electric, Inc. of Alexandria, Minnesota, agreed to repay $8,937.27 to the company’s SIMPLE IRA plan for failure to forward employee contributions, according to a consent order and judgment obtained by the U.S. Department of Labor on March 17.

Loren Koenen also waived his rights to the non-remitted contributions and to any proceeds in the company’s bankruptcy proceedings.

“This action demonstrates our continuing commitment to protect the hard-earned benefits of American workers,” said Gregory Egan, director of the department’s Kansas City Regional Office of the Employee Benefits Security Administration (EBSA), which investigated the violations of the Employee Retirement Income Security Act (ERISA).

The department’s complaint, filed August 12, 2002 in federal district court in Minneapolis, alleged that Koenen failed to forward to the plan contributions withheld from employees’ paychecks from January 2000 to November 2000, using the money to benefit the company.

The company filed for Chapter 7 bankruptcy protection March 27, 2001 in the U.S. Bankruptcy Court for the District of Minnesota in Fergus Falls, Minnesota. There were 17 participants in the plan. The department filed a proof of claim on December 17, 2001 in the federal bankruptcy court for $10,517, including lost interest, against the company.

Egan 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 contact the Kansas City Regional Office at 816.426.5131 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. Loren Koenen)
Civil Action No. 02-CV-2899

Archived News Release — Caution: Information may be out of date.