US Labor Department files suit to restore losses and appoint an independent fiduciary for an abandoned Holden, Mass., Simple IRA Plan

Date of Action: October 1, 2014

Type of Action: Complaint

Name of Defendant: Holden Sand & Gravel, Joseph Montalto, fiduciary for the Holden Sand and Gravel SIMPLE IRA Plan

Allegations: The Holden Sand and Gravel SIMPLE IRA plan was established on Oct. 1, 2005, to provide retirement benefits for employees of Holden Sand and Gravel, in Holden, Mass. The company was the plan's sponsor and administrator; Joseph Montalto, president, treasurer and sole director and owner of the company, managed the plan. As such, they were fiduciaries under the Employee Retirement Income Security Act. Their fiduciary responsibilities included receiving and collecting all employee contributions to the plan and ensuring that the withheld contributions, as plan assets, were properly forwarded to the plan account.

From Dec. 22, 2006 to the present, the defendants breached their fiduciary duties: Defendant Montalto made the decision to stop forwarding employee contributions to the plan and the company failed to forward $3,900 in withheld employee contributions to the plan. The company ceased operations in 2008- and the fiduciaries have failed to administer the plan.

Resolution: The complaint asks the court to: permanently enjoin the defendants from future ERISA violations; require Montalto to restore to the plan any and all losses to the plan stemming from his fiduciary breaches; require an offset from Montalto's individual plan account to be used to help make the other participants' accounts whole; permanently prohibit Montalto from serving as a fiduciary to an ERISA-covered plan; and permanently enjoin the defendants from committing future ERISA violations. The complaint also seeks the appointment of an independent fiduciary to administer the plan and properly distribute plan assets to its participants and their beneficiaries.

Court: U.S. District Court for the District of Massachusetts

Docket Number: 4:14-cv-40141

U.S. Department of Labor materials are accessible at www.dol.gov. The information above is available in large print, Braille, audio tape or disc from the COAST office upon request by calling (202) 693-7828 or TTY (202) 693-7755.