U.S. Labor Department sues trustees of 3 Mendon, Massachusetts, company pension plans seeking restoration of more than $300,000 in plan assets

Boston – The U.S. Department of Labor has sued trustees Michael McLaughlin and William J. Frasier for allegedly misusing $312,555.71 in retirement assets of three Mendon, Massachusetts, pension plans, in violation of the Employee Retirement Income Security Act (ERISA).

McLaughlin and Frasier were trustees of the pension plans, which were sponsored for employees of three now-defunct Mendon companies: McLaughlin Mechanical Services Inc., Pro-Fit Mechanical Insulation and Integrated Energy Solutions. The lawsuit, filed in the U.S. District Court for the District of Massachusetts, alleges that the trustees failed to properly discharge their fiduciary duties to the plans and the plan participants.

The McLaughlin Mechanical/Pro-Fit Prevailing Wage Plan was established to provide pension benefits to employees of the three companies who worked on publicly funded projects subject to the Davis-Bacon Act. The department’s suit alleges that from Sept. 1, 2004, to the present, the defendants have failed to ensure that $233,523.60 in prevailing wage contributions were forwarded to the plan.

The McLaughlin Mechanical Retirement Profit Sharing Plan was established to provide pension benefits for non-collectively bargained employees of the three companies. The lawsuit alleges that, during the same period, Frasier directed that $77,750.74 in the retirement assets be withdrawn from the plan’s bank account and used for the benefit of the companies.

The McLaughlin Mechanical/Pro-Fit 401(k) Plan was established to provide pension benefits for the exclusive benefit of its participants, employees of the companies and their beneficiaries. The defendants allegedly allowed the companies to withhold $1,281.37 in plan contributions from employee paychecks but failed to remit those contributions to the plan.

“The trustees of a retirement plan must ensure that the assets of the plan are used solely to benefit participants. One of the most important responsibilities of plan fiduciaries is to deposit money from workers’ wages into their retirement accounts in a timely manner,” said Phyllis C. Borzi, assistant secretary of the Labor Department’s Employee Benefits Security Administration (EBSA).

As relief, the department seeks a court order to permanently bar the defendants from serving as fiduciaries to any ERISA-covered plan, and to require them to undo prohibited transactions and restore to the plan any and all losses with interest that resulted from their improper actions. In addition, the suit seeks the appointment of an independent fiduciary to manage the plans.

This case was investigated by EBSA’s Boston Regional Office. Employers and workers seeking help with problems relating to private sector pension and health plans may reach the Boston office at 617.565.9600 or the agency toll-free at 866.444.3272. In fiscal year 2008, EBSA achieved monetary results of $1.2 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.

Solis v. McLaughlin
Civil Action Number: 1:09-CV-11103

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