U.S. Labor Department Sues Former Nashville, Tennessee, Company to Restore Assets to Employee Benefit Plan

Archived News Release — Caution: Information may be out of date.

Atlanta, Georgia - The U.S. Department of Labor has sued the former Lakeside Machine Co., Nashville, Tennessee, along with owner Robert Beach, to restore more than $17,000 to participants in the company’s SIMPLE IRA plan.

“The department will act when plan fiduciaries fail to carry out their duties to protect retirement plan assets held on behalf of participants,” 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 Nashville, the suit alleges that the company and Beach violated provisions of the Employee Retirement Income Security Act (ERISA) between December 2001 and July 2004. The suit charges that the defendants failed to segregate plan contributions from company assets and to timely remit contributions to the plan.

The Labor Department is seeking an order requiring the defendants to restore $14,316 in withheld contributions and $2,722 in lost earnings to plan participants. The department is also asking the court to bar Beach from future service as a fiduciary to ERISA plans.

Lakeside Machine’s SIMPLE IRA plan was established in April 2000 to provide benefits to employees upon retirement, death or disability. As of July 2005, the plan had 25 participants and assets of $80,000.

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. Lakeside Machine Co.)
Civil Action File Number 3:06-cv-00427

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Archived News Release — Caution: Information may be out of date.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