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Compliance December 27, 2016
EBSA Seeks Damages from Money Purchase Plan
Two plan trustees are accused of breaching their fiduciary duties by failing to take action to recover funds owed to a money purchase plan, which was loaned in violation of ERISA.
Reported by John Manganaro
SeaBoard Management Inc., a company based in Stevenson, Maryland, is facing a court challenge from the Department of Labor’s (DOL) Employee Benefit Security Administration (EBSA) for breaching the Employee Retirement Income Security Act (ERISA).
According to EBSA, the SeaBoard Management money purchase plan trustees Larry Porter and Susan Porter breached their fiduciary duties to the plan by failing to take action to recover funds owed to the plan, which were loaned in violation of ERISA. To date, principal and interest owed to the plan on this loan is approximately $332,544, according to EBSA.
“The trustees failed to take action to recover funds owed to the plan that were loaned to Waskey Investments, a real estate partnership in which Larry Porter owned a 50% share, in violation of the Employee Retirement Income Security Act,” the complaint states. “To date, principal and interest owed to the plan on this loan is approximately $423,486.”
EBSA is asking the U.S. District Court for the District of Maryland to restore all related losses, including interest or lost opportunity costs to the plan, which occurred as a result of the defendants’ breach of their fiduciary obligations. Further, EBSA wants to permanently enjoin Larry Porter and Susan Porter from serving as a fiduciary, administrator, officer, trustee, custodian, agent, employee, representative, or having control over the assets of any employee benefit plan subject to the ERISA—and to appoint an independent fiduciary at the Porters’ expense.
The text of the complaint is available for download here.