Remember a plan participant or their beneficiary can file a compliant with the DOL at no cost. If the DOL finds merit in the case they will sue the employer. Scary stuff which can be avoided by working with an independent fiduciary.

A U.S. Department of Labor (DOL) suit alleged insufficient oversight and mishandling of plan assets resulting in multiple violations of the Employee Retirement Income Security Act (ERISA). Specifically, the suit alleged that Clark Graphics’ owners, Mary Clark, James Clark and Step

hen Clark, failed in their fiduciary responsibilities as plan trustees by neglecting to monitor the actions of the plans’ administrator. They also failed to review and reconcile the plans’ trust account statements, review participant distribution calculations and require the administrator to issue participant statements. In addition, Dowdell failed to maintain accurate records for participants in both plans; consequently, some participants have not received the correct retirement benefits.

“Employers that sponsor retirement plans have a fiduciary duty to monitor plan assets and ensure they are handled appropriately and protected,” said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. “Contracting with an outside firm to manage those assets does not absolve them of their legal responsibilities.”

The order requires the restoration of all plan losses for which the defendants are liable plus appropriate interest. Specifically, Mary Clark has been ordered to pay back $142,797.23 to the Clark Graphics Defined Benefit Plan and $362,754.23 to the Clark Graphics Profit Sharing Plan. The judgment also permanently enjoins Mary and James Clark from serving as fiduciaries to any employee benefit plan subject to ERISA. 

The plan sponsor is ultimately responsible for the management of their company plan. Even if you outsource this work to professional fiduciaries you must monitor their work.

Please comment or call to discuss.