Compliance January 14, 2014

DOL Seeks Recovery of Pa. Plan Assets

The Department of Labor (DOL) is suing a Bigler, Pennsylvania, trucking company to recover employee contributions and payments to its 401(k) plan.
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The DOL filed the lawsuit in December 2013 in the U.S. District Court for the Western District of Pennsylvania. The suit, Perez v. Kephart (docket number: 3:05-mc-02025), names David Kephart, Timothy Kephart, Kephart Trucking Co., and the Kephart Trucking Co. 401(k) plan as defendants.

The suit alleges that after establishing the Kephart Trucking Co. 401(k) plan in 1988 for its employees, the plan fiduciaries—David Kephart, Timothy Kephart and the company—violated their fiduciary duties under the Employee Retirement Income Security Act (ERISA).

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The plan fiduciaries were responsible for making decisions concerning the remittance of elective contributions to the plan. However, investigators from the DOL’s Employee Benefits Security Administration (EBSA) found that from September 2011 to the present, the company deducted money from the participants’ pay as employee contributions and participant loan repayments. Certain employee deductions representing voluntary contributions and loan repayments for employees of the company, totaling approximately $270,000 plus interest, were not remitted.

The suit by the DOL seeks restitution to the plan of delinquent employee contributions and loan repayments, including lost opportunity costs. The DOL is also asking the court to appoint an independent fiduciary to administer or terminate the plan, and to offset any remaining individual account balances that David Kephart and Timothy Kephart have in the plan against the losses.

The DOL is also seeking an injunction from the court, which would bar the defendants from serving as fiduciaries to any ERISA-covered plans.

The full text of the DOL’s complaint document can be downloaded here.

Products January 14, 2014

Startup Releases Managed Account Solution

CoPiloted, a Boston- and Seattle-based startup, wants to help workers grow 401(k) and individual retirement account (IRA) assets through a new managed account solution.
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Services offered by the firm are designed to help users assess risk levels; select appropriate investments; and determine when to buy, sell and rebalance accounts, according to a statement from the firm.

“Today’s investors often put off dealing with their retirement accounts, and rarely make the necessary adjustments to ensure safe and steady returns,” says Jeremy De Bonet, CoPiloted CEO. “CoPiloted’s fully managed service does it all for you, at a cost that all investors can afford.”

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Bonet adds that CoPiloted uses investment approaches typically accessible only to the very wealthy and tailors these approaches to accounts of all sizes.

To use CoPiloted, retirement savers provide information on current savings accounts and thoughts on investment risk. Based on those answers, CoPiloted provides specific and actionable recommendations that can be automatically enacted, if desired.

Plan sponsors and advisers can use CoPiloted to provide participants with personalized investment advice, the firm says, among other applications.

More on CoPiloted is available at www.copiloted.com.

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