U.S. Labor Department Sues to Restore Assets to Gadsden, Alabama, Company’s Profit Sharing Plan

Archived News Release — Caution: Information may be out of date.

Atlanta, Georgia - The U.S. Department of Labor has sued Bowen Electric Company and owners, Jimmy T. Bowen and Sandra O. Bowen, to restore more than $33,400 to participants in the Gadsden, Alabama, company’s profit sharing plan.

“This lawsuit underscores the Labor Department’s commitment to hold accountable those who are entrusted with workers’ benefits,” said Howard Marsh, director of the department’s Atlanta regional office of the Employee Benefits Security Administration (EBSA).

Filed in U.S. District Court in Birmingham, the suit alleges that the company and the Bowens violated the Employee Retirement Income Security Act (ERISA) between September 1999 and February 2001 when plan assets were transferred from the profit sharing plan and used for purposes other than providing benefits.

The suit seeks an order requiring the defendants to restore $33,406 and lost earnings to the plan. The department is also asking the court to bar the Bowens from future service as fiduciaries to ERISA plans and appoint a successor fiduciary to administer the plan and distribute proceeds to participants.

Bowen’s profit sharing plan was established in the 1980’s. As of September 2005, the plan had four participants and assets of less than $500.

Employers with similar problems, who are not yet the subject of an EBSA investigation, may be eligible to participate in the department’s Voluntary Fiduciary Correction Program (VFCP). Participation in the VFCP requires employers to correct violations of the law but allows them to avoid EBSA enforcement actions and civil penalties as well as any applicable excise taxes. For more information about the VFCP, see www.dol.gov/ebsa.

The case resulted from an investigation conducted by EBSA’s Atlanta regional office. Employers and workers can contact the regional office at 404.562.2156 or EBSA’s toll free number, 1.866.444.EBSA (3272), for help with problems relating to private-sector pension and health plans.

(Chao vs. Bowen Electric Company Inc.)
Civil Action File Number CV-06-AR-0058-S

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Archived News Release — Caution: Information may be out of date.

Contact Name: Dan Fuqua/Jo Anne Burgoyne
Phone Number: 404.562.2078/404.562.2076