U.S. Department of Labor obtains agreement with Mississippi accountant to refrain from acting as fiduciary to ERISA-covered employee benefit plans

Meridian, Mississippi – The U.S. Department of Labor has entered into a settlement agreement with Grady Coleman of Meridian that requires the certified public accountant to refrain from present and future service as a fiduciary or service provider to any employee benefit plan governed by the Employee Retirement Income Security Act (ERISA).

As part of the settlement, Coleman also agreed to pay 20 percent of the fees he received for the services he provided to the plans either directly to the plans or to an independent account established on behalf of the plans, as directed by the department’s Employee Benefits Security Administration (EBSA).

The out-of-court settlement stems from the Labor Department’s investigation of the Bruister and Associates Employee Stock Ownership Plan and the Bruister and Associates Eligible Individual Account Plan, which Coleman served as an independent qualified public accountant.

During EBSA’s investigation into the plans, it was determined that Coleman failed to conduct his plan audits in compliance with generally accepted auditing standards as required by ERISA. As a result, these failures caused the independent qualified public accountant to participate in fiduciary breaches arising out of the plans’ purchases of employer stock for greater than fair market value.

“It is important that employee benefit plans be audited according to ERISA standards to ensure that plan participants are being protected,” said R.C. Marshall, EBSA’s regional administrator in Atlanta. “In this situation, we found that the audit failed to comply with generally accepted auditing standards as required by federal law.”

Employers with similar problems who are not yet subjects of EBSA investigations may be eligible to participate in the department’s Voluntary Fiduciary Correction Program. Participation requires employers to make workers whole but allows them to avoid EBSA enforcement actions and civil penalties as well as any applicable excise taxes.

In fiscal year 2009, EBSA achieved monetary results of $1.3 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 Atlanta Regional 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 http://www.dol.gov/ebsa.

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