U.S. Labor Department Sues to Recover Assets for Former Atlanta Company'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Archived News Release — Caution: Information may be out of date.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 $20,000 in assets to the 401(k) plan of former R&D Environmental Consultants, Atlanta.

"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 Atlanta, the suit alleges that the company, along with plan fiduciaries Dorothy Rowe and James Jones, violated the Employee Retirement Income Security Act (ERISA) between January 2002 and October 2003. The department charges that the defendants failed to segregate employee plan contributions from company assets.

The suit seeks a court order requiring the defendants to restore the $20,107, plus lost earnings, to the plan. The department is also asking the court to bar Rowe and Jones from future service as fiduciaries 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 company, had seven participants and assets of $78,259 as of March 2005.

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. Dorothy Rowe and James Jones)
Civil Action No. 1:06-cv-01203-GET

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Archived News Release — Caution: Information may be out of date.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