U.S. Labor Department lawsuit compels New Britain, Connecticut, company repayment of $2.1 million to retirement plan

Archived News Release — Caution: Information may be out of date.

New Britain, Connecticut – New Britain-based Macristy Industries Inc. and company president Jeffrey B. Barlow have paid $2.1 million to the Macristy Industries Inc. Cash Balance Retirement Income Plan under a consent judgment and order resolving a lawsuit filed by the U.S. Department of Labor alleging violations of the Employee Retirement Income Security Act (ERISA).

“Workers’ retirement plans are not piggy banks for company executives,” said Secretary of Labor Elaine L. Chao. “This legal action restores $2.1 million to these workers’ retirement plan and prohibits the company’s president from ever again serving as a fiduciary of an ERISA-covered employee benefits plan.”

Under the judgment, the defendants acknowledged restoring $1.1 million to the plan after the department filed its suit and paying back an additional $1 million to the plan under this legal settlement. Barlow has resigned as fiduciary to the plan. The court order appointed an independent trustee to manage the plan and an actuary has been retained to determine the current funding status of the plan.

In addition, the order prohibits Barlow from serving as a fiduciary or service provider to any ERISA-covered plan in the future, and requires the company to pay the costs of the independent trustee. The defendants also were ordered to file all required Form 5500 annual reports as soon as possible, file Form 5330 with the Internal Revenue Service and pay any civil penalties assessed by the U.S. Department of Labor.

The suit, filed January 2007 in the U.S. District Court for the District of Connecticut, alleged that between 2002 and the present the defendants improperly transferred up to $2,597,000 in plan assets to accounts of the company and filed false or no annual reports with the Labor Department. They allegedly used approximately $773,186 for legitimate plan benefits and expenses and diverted approximately $1,823,813 to pay for company operations.

Macristy Industries Inc. is a holding company that owns Connecticut Stamping and Bending Inc., Tube Bends Inc., The Sunrise Realty Corp. and Plumb E-Z Manufacturing Co. As of January 2003, the cash balance plan had approximately 286 participants.

This case was investigated by the Boston Regional Office of the department’s Employee Benefits Security Administration (EBSA). Employers and workers can contact the Boston office at 617.565.9600 or toll-free at 1.866.444.EBSA (3272) for help with any problems relating to private sector pension and health plans.

In fiscal year 2006, EBSA achieved monetary results of $1.4 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

Chao v. Macristy Industries Inc.
Civil Action Number: 3:07-CV-85 (AWT)

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