Marinella will manage the firm’s team of investment professionals
and be responsible for all associated investment activities at F-Squared.
Marinella was most recently the executive vice president and global
CIO for State Street Global Advisors’ fixed income and currency group. Before
joining State Street, Marinella was a managing director and head of cash management
for BlackRock, where he also served on the management committee. He began his
career in 1985 as a fixed income salesman at Credit Suisse First Boston.
Marinella has a B.A. from the University of
Massachusetts and an MBA from Boston College. He is a chartered
financial analyst and a director on the board of the University of
Massachusetts Foundation.
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Employer Breached ERISA by Failing to Make Rollover Distribution
An employer breached his fiduciary duties under the
Employee Retirement Income Security Act (ERISA) by failing to honor a former
employee’s rollover distribution request.
The
U.S. District Court for the Southern District of New York found that under the
J&R Equipment, In. 401(k) Plan and Trust, Edward Klepeis was entitled to
have his vested balance in the plan rolled over as of December 31, 2005. Klepeis
asked Joseph T. Falanga, owner of J&R and sole trustee of the plan, to roll
over his plan assets when he resigned in January 2005. Under the terms of the
plan, Klepeis would be entitled to distribution on the next anniversary
date—December 31, 2005.
The
court rejected the defendants’ argument that Falanga was justified in ignoring
Klepeis’ rollover request because it was not in the proper form, noting that
the plan does not require formal claims for participants to receive benefits.
According to the court opinion, when Klepeis complained in 2005 about Falanga’s
unresponsiveness to his rollover request, Qualified Plan Consultants (QPC), the
plan administrator told Klepeis that it needed only Falanga’s authorization,
not a formal request by Klepeis. The court said Falanga, as a plan fiduciary
with the duty to provide plan benefits to participants, should have given his
authorization without unreasonable delay.
In addition, the
court found Falanga breached his fiduciary duty by failing to execute the
subsequent written rollover requests. It rejected the argument that the refusal
to execute the first written request was justified because it was untimely. The
defendants point to no authority, in either the plan or the ERISA statute, for
any timing requirement.
The
defendants argued that the refusal to execute the second written request was
justified because the request was not timely, and because the funds were frozen
pending Internal Revenue Service (IRS) approval of the plan’s termination. The
court noted that the Summary Plan Description (SPD) does state that upon
termination, the plan assets will be distributed as soon as practicable, but
such a provision does not allow a fiduciary to hold onto a participant’s assets
before plan termination occurs or where a participant has no notice that
termination has occurred.
The
court granted summary judgment to Klepeis.
In
January 2011, Klepeis received a letter stating that his account had been
transferred into an IRA managed by Rollover Systems, Inc.; however, his balance
had fallen from $63,936.41, the full value in his plan account as of December
31, 2005, to $57,312.76. The court said J&R would be credited for the
amount it rolled over.
The
court also found that prejudgment interest on $63,936.41 beginning on December
31, 2005, is an appropriate part of Klepeis’ compensation, as he should have
been able to invest his money as he saw fit as of that date, and that he is
entitled to attorneys’ fees. He was granted leave to submit proof for his
claims of pre-judgment interest and attorneys’ fees.
The opinion in Klepeis v. J&R Equipment Inc. is here.