Defendants to restore $26K to Windham, Maine, Simple IRA plan following US Labor Department lawsuit

Date of action: June 1, 2015

Type of action: Consent Judgment and Order.

Names of defendant: Seavey's Furniture & Appliance Inc. and Timothy W. Seavey

Allegations: The Seavey's Furniture & Appliance Inc. Simple IRA plan was established to provide retirement benefits for participating employees of Seavey's Furniture & Appliance Inc., located in Windham, Maine. The plan was funded by amounts withheld from employees' paychecks as employee contributions and by matching employer contributions.

An investigation by the U.S. Department of Labor's Employee Benefits Security Administration found that Seavey's Furniture & Appliance Inc., the plan's sponsor and administrator, and Timothy W. Seavey, president and co-owner of the business, violated their fiduciary responsibilities under the Employee Retirement Income Security Act when they failed to remit withheld employee contributions to the plan from September 2009 to the present. The Labor Department filed suit against the defendants in December 2014.

Resolution: The court has ordered Timothy W. Seavey to restore $26,282.54, representing principal and pre-judgment lost opportunity costs, to the plan in 48 monthly installments. The funds shall be allocated among plan participants whose employee contributions were withheld but never transmitted to the plan and whose employer contributions were not collected to remit to the plan. Defendant Seavey will also submit proof of payments and his actions to the Labor Department. The order also permanently enjoins Seavey from ever again serving as a fiduciary to an ERISA-covered plan and from future ERISA violations.

Quote: "Once again, we remind plan fiduciaries that they are required to administer the plan solely in the interests of its participants, those individuals who have entrusted employers with their retirement security, and not in the interests of themselves or any other parties," said Susan Hensley, EBSA's regional director for New England.

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

Docket Number: 2:14-cv-00533-JDL