U.S. Labor Department Sues to Recover Assets for Former Birmingham, Ala. Law Firm's 401(k) Plan

Archived News Release — Caution: Information may be out of date.

Atlanta - The U.S. Department of Labor has sued to restore more than $6,500 in assets to the 401(k) plan of the former Stewart Law Group, Birmingham, Ala.

"Trustees of a 401(k) plan have a responsibility to ensure that the assets of the plan are used solely to benefit 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 Birmingham, the suit alleges that the firm and Marvin L. Stewart, Jr., the plan's fiduciary, violated the Employee Retirement Income Security Act (ERISA) between January 2001 and December 2002. The department charges that the defendants failed to remit $4,364 in employee contributions and $2,198 in participant loan payments to the plan.

The suit seeks a court order requiring the defendants to restore the funds, plus lost earnings, to the plan. The department is also asking the court to bar Stewart from future service as a fiduciary to ERISA plans and appoint a successor fiduciary to administer the plan and distribute plan assets to participants.

The 401(k) plan, sponsored by the firm, had 13 participants and assets of $18,286 as of March 2004.

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.

EBSA's Atlanta regional office investigated the case. Employers and workers can contact the 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. Stewart Law Group, P.C.)
Civil Action No. CV-06-B-0851-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Archived News Release — Caution: Information may be out of date.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