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Regulation and Compliance > Federal Regulation > DOL

DOL wins 2 consent judgments

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The Department of Labor has emerged victorious in two complaints filed against plan sponsors on behalf of participants.

In the first, former employees of Oxford Holdings Inc. are on track to recover more than $130,000 after contributions were not made to the company’s 401(k) plan after they had been deducted from employees’ paychecks.

The Employee Benefit Security Administration (EBSA) filed a complaint in August against Steven J. Watkins, plan trustee and owner of Oxford Holdings Inc., a former construction company based in Fort Lauderdale and Aetna 401(k) Plan.

The Aetna plan was established by Oxford for its employees and permitted participants to contribute a portion of their pay through payroll deductions.

An investigation found that from April 12, 2010 through April 5, 2013, Oxford and Watkins withheld a total of $117,167 in employee contributions and did not segregate the contributions from company assets.

In fact, they never forwarded these contributions to the plan.

In April 2013, the company ceased operations and the defendants failed to terminate the plan and ensure that its assets, totaling $130,525, were appropriately distributed to the plan participants.

Since the complaint was filed, defendants have made restitution to the plan in the amount of $95,000.

Not only are the defendants barred from acting as fiduciaries, trustees, agents, or representatives to any employee benefit plan, they also have been ordered to make restitution of $35,525 to the plan that includes interest or lost opportunity costs that occurred as a result of their breaches of fiduciary obligations through Sept. 30, 2015.

Post-judgment interest will continue to accrue until paid in full.

They have also been ordered to appoint AMI Benefit Plan Administrators Inc. as independent fiduciary to the plan in order to collect, marshal, and administer the plan.

The defendants will reimburse the plan for AMI’s reasonable fees and expenses with respect to services performed for the plan.

In the second case, a judgment restoring more than $40,000 was obtained in Douglassville, Pennsylvania, against the trustees of a dental practice’s 401(k) plan.

The judgment, against Lisa A. Ferrari, DMD, Clifton Casey, and Lisa A. Ferrari, DMD, LLC, ordered the restoration of $44,986.08, which includes lost interest, to the plan after contributions were not made.

The DOL said that, from 2009 through 2012, the plan trustees failed to ensure elective employee contributions and employer safe harbor contributions were remitted to the plan on a timely basis.


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