Defunct Bay Area Engineering Firm and Executive Ordered to Repay $142,000 to 401(k) Plan

Archived News Release — Caution: Information may be out of date.

San Francisco, California - Now-defunct GKO & Associates, a South San Francisco-based engineering consulting firm, and its former president must repay more than $142,578 to the company’s 401(k) plan under a default judgment obtained by the U.S. Department of Labor (DOL). The judgment resolves a lawsuit against the company and its former president James Winzler for misuse of employee contributions to pay corporate expenses.

“Plan officials have a duty to protect employees’ retirement assets,” said Ann L. Combs, assistant secretary of labor for the Employee Benefits Security Administration (EBSA). “The Labor Department will not hesitate to hold accountable those who do not fulfill their duties.”

Under the order, Winzler is removed as a plan fiduciary and permanently barred from service to employee benefit plans in the future. The order also appoints an independent fiduciary to terminate the plan and distribute assets to eligible plan participants. The plan covered as many as 33 participants and had $250,077 in assets as of May 31, 2005. Most of the participants worked in the Bay Area or in a branch office in Honolulu.

The DOL filed suit in U.S. District Court for the Northern District of California in May 2005, alleging that Winzler, GKO & Associates, and its successor, GKO Consulting Engineers, violated the Employee Retirement Income Security Act (ERISA) by failing to remit employee contributions to the 401(k) plan in a timely manner. The violations occurred between January 1999 and May 2004, when the company ceased operation.

In fiscal year 2005, EBSA achieved monetary results of $1.7 billion related to pension, 401(k), health and other benefits for millions of American workers and their families. Employers and workers with questions or concerns regarding their private-sector pension and health plans can contact the DOL EBSA regional office in San Francisco at 415.975.4600 or EBSA’s toll-free number of 1.866.444.EBSA (3272). Information is also available from the agency’s Web site at www.dol.gov/ebsa.

(Chao v. GKO & Associates)
Civil Action No. C-05-02202 JSW

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Archived News Release — Caution: Information may be out of date.

Contact Name: Deanne Amaden
Phone Number: 415.975.4741