DOL Announces More Enforcements

Word that the Department of Labor (DOL) is stepping up its enforcement is being backed up by the number of actions being announced.

The agency announced three more cases in which it has initiated legal actions on behalf of retirement plan participants. In the first case, Perez v. Ferguson et al (docket number: 2:13-cv-02201), the DOL filed a complaint with the U.S. District Court for the Central District of Illinois alleging Roger D. Ferguson and Industrial Surfacing Corp. in their capacities as fiduciaries to the Industrial Surfacing Corp. 401(k) Plan, failed to forward $47,636.44 in employee pre-tax contributions to the plan from May 2010 to April 2011.

The company, which was based in Urbana, Illinois, ceased operations in 2011 and was dissolved in 2012. As of December 2013, the plan had $17,899.60 in assets.

The complaint asks to have Ferguson restore all losses to the plan, including lost opportunity costs, resulting from the fiduciary breaches for which he is liable and correct the prohibited transactions. In addition, the complaint asks to remove both the company and Ferguson as fiduciaries of the plan and prevents them from serving as fiduciaries to any plan subject to the Employee Retirement Income Security Act (ERISA). Finally, the complaint asks that an independent fiduciary be appointed to administer and terminate the plan, as well and distribute its assets to participants.

In the second case, Perez v. Fisher et al (docket number: 1:13-cv-06170), the DOL filed a complaint in the U.S. District Court for the Northern District of Illinois, Eastern Division alleging David Fisher and Fisher & Partners Structural Engineers, Inc., as fiduciaries to their company’s SIMPLE IRA Plan, failed to forward $9,640.96 in employee pre-tax contributions and an additional $21,852.94 in employer contributions to the plan from January 2008 to January 2011.

The DOL’s actions resulted in a judgment that the company is liable to the SIMPLE IRA Plan for $33,409.80. This includes both the employee and employer contributions they failed to forward to the plan, as well as lost opportunity costs. In addition, the company will be removed as fiduciaries of the plan and prevented from serving as fiduciaries for any plan subject to ERISA.

In the third case, Harris v. Koresko et al (docket number: 2:09-cv-00988-MAM), the DOL was granted a limited injunction by the U.S. District Court for the Eastern District of Pennsylvania. The district court agreed with the DOL’s allegations that harm was being done, by the Pennsylvania-based fiduciaries of welfare benefit plans sponsored by employers nationwide, to the plans’ participants.

Defendants John J. Koresko, V, PennMont Benefit Services, Inc., Penn Public Trust, Koresko and Associates, P.C., and Koresko Law Firm, P.C., their agents, employees, service providers, accountants, attorneys, and any other party acting at their direction, were removed from positions held with the Single Employer Welfare Benefit Plan Trust (SEWBPT) and/or the Regional Employers Assurance League Voluntary Employees’ Beneficiary Association Trust (REAL VEBA). The defendants were also enjoined from serving as administrator, fiduciary, officer, trustee, custodian, counsel, agent, representative (including acting as attorney in fact), or consultant or adviser of the plans or employer arrangements participating in the SEWBPT and/or the REAL VEBA.

An independent fiduciary for the plans was also appointed by the court to obtain an inventory of assets and to distribute the assets of the plans appropriately.