Massachusetts employer agrees to restore employee contributions to 401(k) plan to resolve U.S. Labor Department lawsuit

Archived News Release — Caution: Information may be out of date.

Boston – David M. Hirsch, owner and president of Adventure World Inc. in Shirley, Massachusetts, has agreed to restore $5,856 to the company’s 401(k) plan to settle a lawsuit filed by the U.S. Department of Labor alleging he violated his duty as a trustee under the Employee Retirement Income Security Act (ERISA).

The suit, filed in the U.S. District Court for the District of Massachusetts, alleges that Hirsch failed to forward to the plan employee contributions withheld from employees’ paychecks between May 1 and December 31, 2003. In January 2004, both the company and Hirsch filed for bankruptcy.

The Adventure World Inc. 401(k) Profit-Sharing Plan provides retirement benefits for company employees. The Employee Benefits Security Administration’s (EBSA) Boston Regional Office, which investigated the case, enforces ERISA requirements to protect private sector employee benefit plans.

James Benages, regional director of EBSA in Boston, said, “This defendant failed to discharge his fiduciary duties to the plan and its participants. The funds of employee benefit plans are to be used for the sole benefit of plan participants and beneficiaries, and not for the benefit of the company that sponsors the plan.”

A consent judgment obtained by the department orders Hirsch to pay restitution to the plan and to distribute to participants their shares of any restitution made to the plan. The restitution will be made by offsetting the $5,856 from Hirsch’s own plan account. After distributing all the assets remaining in the plan, Hirsch will be permanently barred from serving as a fiduciary to any ERISA-covered plan in the future.

Employers and workers can reach EBSA at 617.565.9600 or toll-free at 866.444.3272 for help with problems relating to private sector retirement and health plans. In fiscal year 2007, EBSA achieved monetary results of $1.5 billion related to pension, 401(k), health and other benefits for millions of American workers and their families. Additional information can be found at www.dol.gov/ebsa.

Chao v. Hirsch
Civil Action Number 1:08-CV-10247-RCL

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Archived News Release — Caution: Information may be out of date.