U.S. Labor Department reaches agreement restoring funds to Mentor, Ohio-based 401(k) plan

Archived News Release — Caution: Information may be out of date.

Mentor, Ohio – The U.S. Department of Labor has reached agreement with Kevin A. Tenkku, president of MED-XS Solutions Inc. in Mentor, requiring him to pay $38,612.17 to the company’s 401(k) plan and removing him as a fiduciary to the plan.

In a consent judgment filed in federal district court in Cleveland, Tenkku agreed to pay the funds after he failed to forward employee contributions and loan repayments to the company’s 401(k) plan during various periods beginning in June 2002. Failing to forward such contributions and repayments in a timely manner is a violation of the Employee Retirement Income Security Act (ERISA).

“The department will act when plan fiduciaries fail to carry out their duty to protect the retirement plan assets held on behalf of participants,” said Joseph Menez, director of the Labor Department’s Employee Benefits Security Administration (EBSA) district office in Cincinnati.

Tenkku further agreed not to receive distributions from his own 401(k) funds until the amounts owed to the company 401(k) plan are paid in full. In addition, the consent judgment requires Tenkku to liquidate the plan and distribute assets as appropriate.

Employers with similar problems who are not yet the subjects of EBSA investigations 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 and civil penalties as well as any applicable excise taxes. For more information about the VFCP, see www.dol.gov/ebsa.

This suit resulted from an investigation conducted by EBSA’s Cincinnati Regional Office. Employers and workers can reach the Cincinnati office at 859.578.4680 or through EBSA’s toll-free number, 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. MED-XS
Civil Action Number 1:07-cv-2239

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Archived News Release — Caution: Information may be out of date.