U.S. Labor Department obtains settlement appointing independent fiduciary to manage pension plan of Cleveland-based Polytech Inc.

Archived News Release — Caution: Information may be out of date.

Cleveland – The U.S. Department of Labor has obtained a consent judgment and order appointing an independent fiduciary to manage the pension plan of Polytech Inc. of Cleveland, restoring $212,454.93 to the plan and removing Norman Bliss and Anthony Sumodi from acting as fiduciaries to any plan covered by the Employee Retirement Income Security Act (ERISA).

Polytech Inc. and plan trustees Bliss and Sumodi failed to forward employee contributions and participant loan repayments withheld from employees’ pay to the plan or to remit contributions in a timely manner during different periods between January 2003 and February 2006. At the time of the improper actions, Bliss was chief executive officer and chairman of the board of directors, and Sumodi was the company’s senior manager for the administrative services.

Polytech and the fiduciaries also retained the plan assets with the company’s general assets and did not maintain a fidelity bond that would protect the plan against acts of fraud or dishonesty, as required by ERISA.

“The Labor Department is committed to protecting the benefits of America’s workers and retirees,” said Bradford P. Campbell, assistant secretary of the Labor Department’s Employee Benefits Security Administration (EBSA). “Our legal action restores money to pay the future retirement benefits of these workers.”

In addition to restoring the funds, Bliss and Sumodi are permanently barred from serving in a fiduciary capacity to any ERISA-covered plan in the future and must correct any prohibited transactions. The consent order and complaint were filed simultaneously in federal district court in Cleveland.

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

The case resulted from an investigation conducted by EBSA’s Cincinnati Regional Office. Employers and workers can reach that office at 859.578.4680 or toll-free at 1.866.444.EBSA (3272) for help with problems relating to private sector retirement 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. Polytech Inc.
Civil Action Number 1:07-cv-02384-SO

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