U.S. Labor Department obtains court order restoring assets to former Portland, Oregon retirement plan

Archived News Release — Caution: Information may be out of date.

Portland, Oregon – The U.S. Department of Labor has obtained a consent order and judgment restoring more than $19,000 to the retirement plan of defunct Rundel Products, Inc. in Portland.

Under the judgment, William Patterson and C. Dixon Rauch are permanently barred from serving as fiduciaries or service providers to any employee benefit plan governed by the Employee Retirement Income Security Act (ERISA) in the future. The order requires Patterson and Rauch to restore $19,462 to the plan and appoints an independent fiduciary to manage the plan and make distributions to affected former employees.

“Plan officials have a duty to properly manage plans in a way that benefits employees. This action restores plan assets that were improperly used to benefit the employer,” said Frank Clisham, regional director of the department’s Employee Benefits Security Administration (EBSA) in San Francisco.

On May 30, 2006, the Labor Department sued Patterson and Rauch for failure to forward more than $15,000 in employee contributions to the plan and to pay more than $4,000 in lost opportunity costs on the delinquent employee contributions. Patterson and Rauch were owners and officers of the company as well as trustees of the company’s retirement plan. The company ceased business and was placed into bankruptcy during 2002.

The consent order, filed in federal district court in Oregon, resulted from an investigation conducted by EBSA’s Seattle District Office. 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 reach EBSA’s Seattle office at 206.553.4244 or toll-free at 1.866.444.EBSA (3272) for help with problems relating to private sector retirement and health plans.

Employers with similar problems who are not yet the subject of investigations by EBSA may be eligible to participate in the department’s Voluntary Fiduciary Correction Program (VFCP). Participation in the VFCP requires employers to correct violations 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.

Chao v. Patterson
Civil Action Number 3:06-CV-761-HA

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Archived News Release — Caution: Information may be out of date.