The free phone forum, “Plan Terminations: What You Need to
Know Before You Terminate That Plan,” will be held on May 6 at 2 p.m. EST. The
one-hour session will feature IRS employees discussing important items to
review when a retirement plan terminates, such as:
How to
set the date of termination;
The
permanency requirement;
The
need to update the plan for all law requirements; and
Accelerated
vesting requirements.
The forum will also discuss the different types of
terminations for defined benefit plans and what happens if the plan is
overfunded or underfunded.
DOL Seeks Losses from Failing to Remit Contributions
The U.S. Department of Labor (DOL) has filed a
lawsuit to recover losses to the Cargill Heating & Air Conditioning Co.
Inc. Savings Plan in La Crosse, Wisconsin.
According to the DOL, Michael Earl Galstad was president and
majority owner of Cargill Heating & Air Conditioning Co. and failed to
remit $27,812.90 in employee contributions to the plan from June 25, 2009, to
April 12, 2012. The contributions remained in the company’s general funds for
its use. Galstad restored $23,657.86 in unremitted employee contributions to
the plan; however, $4,155.04 in employee contributions remains outstanding.
Additionally, pursuant to several state and federal
contracts subject to the Davis Bacon Act, Service Contract Act, or state
prevailing-wage laws, Cargill and Galstad agreed to pay employer contributions
as prevailing-wage fringe benefits to the plan. Between June 30, 2009, and
April 30, 2012, $236,738.12 in prevailing wage contributions was owed to the
plan. Galstad remitted $38,500 to the plan; however, the remaining $198,238.12
remains outstanding.
Cargill
and Galstad also failed to collect employer contributions owed to the plan from
May 31, 2008, through May 31, 2010, resulting in a loss of $59,009.31 to the
plan.
The complaint seeks a judgment ordering Galstad and Cargill
Heating & Air Conditioning Co. Inc. to: make good all losses to the plan,
including lost opportunity costs, resulting from fiduciary breaches; correct
the prohibited transactions; disgorge all ill-gotten gains; and to permanently
enjoin them from serving as fiduciaries or service providers to any employee
benefit plan covered by the Employee Retirement Income Security Act (ERISA).
Meanwhile, the DOL announced that a federal judge ordered a
trustee to restore losses to the Louis & Riparetti Retirement Plan in
Scotts Valley, California. The U.S. Department of Labor filed a lawsuit on
April 10, 2012, to recover unremitted employee contributions, uncollected employer
contributions, and associated lost opportunity costs for the Louis &
Riparetti Inc. Retirement Plan. Louis & Riparetti, Inc. ceased operations
after filing for Chapter 7 bankruptcy protection on April 2, 2010.
The department’s suit alleged that Louis & Riparetti,
Inc., the plan administrator, and Darrel Louis, the company’s owner and plan’s
trustee, violated ERISA by failing to remit employee contributions to the
retirement plan and by failing to collect mandatory prevailing-wage employer
contributions owed to the plan.
In
the consent judgment and order, Louis agreed to make restitution to the plan in
the amount of $163,676 plus interest in installments. Upon completion of all
payments, Louis will be permanently enjoined and restrained from future service
as a fiduciary of, or service provider to, any ERISA-covered employee benefit
plan. The consent judgment allows the department to force sale of Louis’s
properties for the benefit of the plan and further requires him to name the
plan as a beneficiary of his $1 million life insurance policy until all losses
have been restored to the plan.