U.S. Department of Labor Sues 401(k) Plan Fiduciaries of Nu Alpha Manufacturing

Archived News Release — Caution: Information may be out of date.

Parsons, Kansas - The U.S. Department of Labor (DOL) sued the fiduciaries of the Nu Alpha Manufacturing Inc. 401(k) plan for failing to forward employee contributions to the plan, failing to segregate the contributions from corporate assets and abandoning the plan without distributing the assets to plan participants.

The DOL's Employee Benefits Security Administration (EBSA) investigated the case. "Our agency acts quickly to help workers get their benefits when plan assets are either misused or the plans are abandoned," said Steve Eischen, director of EBSA's Kansas City regional office.

The suit, filed in Federal District Court in the District of Kansas, alleged that Charles E. Becket failed to forward $11,477.45 in contributions withheld from employees' paychecks from February 2002 to August 2002. It also alleges that Ray L. Sampson failed to forward $1,805.15 in contributions withheld from employees' paychecks during the period from August 2002 to January 2003.

The defendants allegedly co-mingled the employees' contributions with the general assets of Nu Alpha Manufacturing Inc., in violation of the Employee Retirement Income Security Act of 1974 (ERISA). Sampson also abandoned the plan and failed to ensure that approximately $61,000 in plan assets were distributed to the 26 plan participants.

Plans become orphan plans when they are abandoned by all fiduciaries designated to manage and operate them and their assets. As a result of the abandonment, participants and beneficiaries are unable to communicate with the plan fiduciary or obtain distributions from their accounts.

The suit seeks to order Becket and Sampson to restore all losses with interest. It requires Sampson to assist in any manner reasonable to ensure the assets of the plan are distributed to participants.

Nu Alpha Manufacturing Inc., formerly an aluminum processing company, filed for bankruptcy in May 2003 and ceased operations in September 2003.

Employers and workers can reach EBSA's Kansas City regional office at 816-426-5131, or through EBSA's toll-free number of 1-866-444-EBSA (3272), for help with problems relating to private-sector retirement and health plans.

(Chao v. Nu Alpha Manufacturing 401(k) Plan)
Civil Action No. 06-2188

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

Contact Name: Norma J. Conrad
Phone Number: 816.426.5481