Fiduciary enjoined for permitting prohibited transactions from National Production Workers Union Severance Trust Plan

Date of Action: Jan. 22, 2016

Type of Action: Complaint and Consent Order and Judgment

Names of Defendant: Anthony Monaco, National Production Workers Union Severance Trust Plan

Allegations: From at least Jan, 1, 2010 to April 30, 2015, the trustees of the Oak Brook, Illinois-based National Production Workers Union Severance Trust Plan had appointed Anthony Monaco to serve as Plan Manager of the Severance Plan, in such capacity he served as a fiduciary to the Severance Plan.

Between at least Jan. 1, 2010 and approximately Nov. 16, 2012, the Severance Plan and the National Production Workers Insurance Trust Fund (Insurance Fund) jointly paid administrative expenses. During that time period, Monaco oversaw the administration of the Severance Plan’s and the Insurance Fund’s finances and he was responsible for overseeing the proper allocation of expenses between the Severance Plan and the Insurance Fund.

An investigation by the Employee Benefits Security Administration found several instances when the Severance Fund improperly paid for the Insurance Fund’s administrative expenses. Between Jan. 1, 2010, and Dec. 31, 2010, the Severance Plan paid $11,359.00 in shared expenses that should have been paid by the Insurance Fund. These expenses were improperly allocated to the Severance Plan by Monaco and were in fact expenses related solely to the Insurance Fund. Additionally during the same time, the Severance Plan paid $13,420.12 in shared expenses that should have been paid by the Insurance Fund. These expenses were improperly allocated to the Severance Plan by Monaco and were in fact expenses related solely to the Insurance Fund. On approximately Nov. 16, 2012, the Severance Plan paid $32,678.50 in shared expenses that should have been paid by the Insurance Fund. These expenses were improperly allocated to the Severance Plan by Monaco and were in fact expenses related solely to the Insurance Fund. These transactions violated the Employee Retirement Income Security Act.

Monaco also failed to locate missing participants and make distributions to them. At least 10,192 participants with plan accounts totaling over $13,600,000, have funds that Monaco failed to distribute to them.

Monaco also improperly allowed the Severance Fund to transfer plan assets to other individuals and an affiliated 401(k) Plan. These additional improper transfers totaled $6,248.00

Resolution: Monaco resigned from all fiduciary positions with the plan, including the position of plan administrator and plan manager. All of the losses associated with the alleged violations in the complaint have been repaid to the plan and distributions will be made to participants. Moreover, Monaco has been enjoined from serving as a fiduciary or service provider to any ERISA covered plan in the future.

Court: United States District Court, Northern District of Illinois, Eastern Division

Docket Number: 1:16-CV-00597

Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans. Additional information can be found at www.dol.gov/ebsa/.