U.S. Labor Department Recovers More Than $66,000 for Former Decatur, Alabama 401(k) Plan

Archived News Release — Caution: Information may be out of date.

Atlanta, Georgia - A U.S. Department of Labor lawsuit has resulted in a court judgment ordering the CEO of now-bankrupt D&S Consulting Engineering Inc., Decatur, Alabama, to restore $66,128 to the company’s 401(k) plan.

“This case represents our commitment to protect workers by seeing that 401(k) plan assets are used solely to benefit participants,” said Howard Marsh, director of the department’s Atlanta regional office of the Employee Benefits Security Administration (EBSA). “We are extremely pleased that these funds will be restored.”

Filed in U.S. District Court in Birmingham, Alabama, the Labor Department’s suit alleged that the company and its CEO and president, Hulet M. Smith III, violated the Employee Retirement Income Security Act (ERISA) in 2002. The department charged that the defendants failed to remit employee contributions to the plan.

The court directed Smith to restore to the plan $41,104 in un-remitted contributions and $25,024 in lost earnings and ordered appointment of an independent fiduciary to manage the plan. The court also permanently barred Smith from serving as a fiduciary for any plan covered by ERISA. The department’s suit against the former company has been dismissed.

Prior to filing for bankruptcy in June 2002, D&S operated as an engineering and consulting firm. The company’s 401(k) plan had 50 participants and assets of approximately $1.14 million as of December 2003.

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 program requires employers to correct all violations 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 suit followed an investigation 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. In fiscal year 2005, EBSA achieved monetary results of $1.7 billion related to the pension, 401(k), health and other benefits for millions of American workers and their families.

(Chao v. D&S Consulting Engineering, Inc.)
Civil Action No. 5:05-cv-722-UWC

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Archived News Release — Caution: Information may be out of date.

Contact Name: Dan Fuqua/Jo Anne Burgoyne
Phone Number: 404.562.2078/404.562.2075