MT. HOREB (WKOW) -- The U.S. Department of Labor is suing Mt. Horeb Plumbing Inc. and its owner and president Michael D. O'Connell.
The suit claims the company violated the Employee Retirement Income Security Act (ERISA) by failing to make $30,120.65 in contributions and for untimely remitting $49,235.15 to the company's employee 401(k) plan.
The suit filed in U.S. District Court, in Madison, alleges the defendants didn't forward the $30,120.65 in employee contributions to the 401(k) plan from January 3, 2006 to October 6, 2009. Instead, the defendants allegedly co-mingled the employee contributions with the general assets of the company. They then allegedly used the money to pay the company's general operating expenses. The suit also claims that during that time period an additional $49,235.15 was not remitted to the plan in a timely manner. As of January 31, 2009, the plan had 14 participants and $262,930 in assets.
"The law clearly states that contributions cannot be retained in the company's general operating account and must be deposited into the plan's trust," said Steve Haugen, regional director of the department's Employee Benefits Security Administration in Chicago, Ill. "The Labor Department will continue to help workers obtain their rightful benefits when plan fiduciaries violate the law."
The suit requests a court order to require a repayment of losses with interest, to permanently bar O'Connell and the company from serving as fiduciaries or service providers to any ERISA- covered employee benefit plan in the future and to appoint an independent fiduciary to oversee the plan.
This case is part of the EBSA's employee contribution project. The project is focused on safeguarding workers' contributions to 401(k) and health benefit plans. You can call the EBSA's Chicago Regional Office at 312-353-0900 or 866-444-3272 for help with problems related to private sector retirement and health plans. You can also find more information by clicking here.