U.S. Labor Department sues to recover assets for former Birmingham, Ala., 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Archived News Release — Caution: Information may be out of date.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 $17,300 in assets to the 401(k) plan of S & M Holdings, a former Birmingham, Alabama, auto parts and services company.

“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 Employee Benefits Security Administration (EBSA) Atlanta Regional Office.

Filed in U.S. District Court in Birmingham, the suit alleges that the company and Robert D. Sandusky, the plan’s trustee, violated the Employee Retirement Income Security Act (ERISA) between January 2002 and April 2004. The defendants allegedly failed to remit employee contributions to the 401(k) plan.

The suit seeks a court order requiring the defendants to restore $17,353, plus interest and lost earnings, to the plan. The department is also asking the court to bar Sandusky from future service as a fiduciary to ERISA plans and appoint a successor fiduciary to manage the plan and distribute its assets to eligible participants.

S & M Holdings ceased operations in January 2005. The company’s 401(k) plan had 54 participants and assets of more than $492,500 as of June 2004, the latest data available.

Employers with similar problems who are not yet subjects of EBSA investigations may be eligible to participate in the department’s Voluntary Fiduciary Correction Program. Participation requires employers to make workers whole but allows them to avoid EBSA enforcement actions and civil penalties as well as any applicable excise taxes. For more information, see www.dol.gov/ebsa.

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. Employers and workers can contact the agency’s Atlanta Regional Office at 404.302.3900 or toll-free at 1.866.444.EBSA (3272) for help with problems relating to private sector pension and health plans.

Chao vs. S & M Holdings Inc.
Civil Action File Number: 2:07-cv-01084-IPJ

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Archived News Release — Caution: Information may be out of date.