US Labor Department secures payment to, appointment of independent fiduciary for abandoned Holden, Mass., Simple IRA Plan

Date of Action: March 24, 2015

Type of Action: Consent Judgment and Order

Name of Defendants:  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 in 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. An investigation by the Employee Benefits Security Administration found that the defendants violated their fiduciary responsibilities: 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. The department filed suit in October 2014 seeking relief.

Resolution: The court has approved a consent judgment and order that requires Joseph Montalto to restore $3,900 to the plan, waive his interest in the plan and allocate his interest to the other plan participants. Montalto is also permanently enjoined from serving as a fiduciary to any ERISA-covered plan. The judgment also appoints Northeast Retirement Services of Woburn, Massachusetts, as 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-TSH

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