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Compliance September 1, 2016
401(k) Plan Fiduciaries on the Hook for More Than $200K
A defunct company and its 401(k) plan trustee have been ordered to restore contributions that weren't remitted to the plan as well as interest on contributions.
Reported by Rebecca Moore
The U.S. Department of Labor (DOL) has obtained a default judgment ordering fiduciaries of a defunct medical research company’s 401(k) plan to restore $221,225.08 to the plan.
According to the court order, that amount consists of consists of $178,051.42 in missing employer contributions; $36,559.90 in interest on missing employer contributions, calculated as of July 20, 2016; and $6,613.76 in lost interest on untimely employee contributions, calculated as of July 20, 2016.
The DOL say an investigation by its Employee Benefits Security Administration (EBSA) found that Global Research Services, a defunct Rockville, Maryland-based medical research company, established a 401(k) plan for its employees in 2007. Between 2010 and 2013, the company and plan trustee Julie E. Garrett failed to remit elective employee contributions to the plan in a timely manner, and did not pay interest on the untimely contributions. The company also failed to remit employer contributions to the plan from 2010 to 2012.
The court order also removes the defendants as plan fiduciaries, and permanently enjoins them from serving as fiduciaries to any plan covered by the Employee Retirement Income Security Act (ERISA).