U.S. Department of Labor obtains consent judgment requiring defunct Greensboro, North Carolina, wholesaler and retailer to restore pension funds

Atlanta – The U.S. Department of Labor has entered into a consent judgment and order with defunct Shelton and Associates and a corporate officer to restore assets to the former company’s pension plan.

The order follows a lawsuit filed in August 2008 in the U.S. District Court for the Middle District of North Carolina alleging that the defendants violated provisions of the Employee Retirement Income Security Act (ERISA) when they failed to make required contributions on behalf of participants in 2003 and 2004. Furthermore, the suit alleged that the defendants abandoned the plan when the company ceased operations in 2005.

Shelton and Associates and John C. Shelton are required to restore to the plan $14,547 in unpaid employer contributions plus an additional $4,875 for lost earnings on those contributions through December 31, 2008. John C. Shelton is waiving his right to receive contributions to his plan account for the years 2003 and 2004.

Under a separate agreement, Margaret Shelton, another corporate officer, waived her right to receive contributions to her plan account for 2003 and 2004 and will not be required to restore any funds to the plan.

The court also appointed Jeanne Bryant as successor fiduciary to terminate the plan and distribute the assets. The order permanently bars Shelton and Associates and John C. Shelton from serving as fiduciaries of any ERISA-covered plans.

“We are pleased that this judgment and order holds the company and its officers to the promise that was made to plan participants when the pension plan was created,” said R.C. Marshall, director of the Atlanta Regional Office of the Labor Department’s Employee Benefits Security Administration (EBSA).

Shelton and Associates was a Greensboro, North Carolina-based wholesale and retail supplier of shipping and packaging materials. At the end of 2004, the plan held assets of $249,000.

This case was investigated by the EBSA’s Atlanta Regional Office. Employers and workers can reach that office at 404.302.3900 or toll-free at 866.444.3272 for help with problems relating to private sector retirement and health plans. For more information, see www.dol.gov/ebsa.

Secretary of Labor v. Shelton and Associates Inc.
Civil Action File Number 1:08-cv-598

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