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Compliance August 19, 2015
DOL Says Company Kept Employee 401(k) Contributions
A construction company ceased operations in 2013 and has not paid 401(k) participants their plan assets, according to a lawsuit.
Reported by Rebecca Moore
The U.S. Department of Labor’s (DOL’s) Employee Benefit Security Administration (EBSA) has filed a lawsuit against Oxford Holdings, a former construction company, and its president and 401(k) plan trustee, Steven J. Watkins, alleging that plan contributions withheld from employee paychecks were kept by the company.
Aetna Construction was also a participating employer in the plan. The lawsuit alleges that during the period from April 12, 2010, and April 5, 2013, contributions in the amounts of $139,144 and $117,167 were withheld from employee paychecks by each employer and not segregated from general company assets. The DOL says the plan assets were used for company purposes and obligations.
Oxford Holdings and Aetna Construction ceased operations in April 2013. The lawsuit says Watkins and the companies failed to terminate the plan and distribute assets to participants.
The DOL is asking the court to order the defendants to restore to the plan all losses, including interest or lost opportunity costs, which occurred as a result of their breaches of Employee Retirement Income Security Act (ERISA) fiduciary obligations. In addition, the lawsuit asks the court to appoint an independent fiduciary, at the defendants’ expense, to arrange for the plan’s termination and distributions of its assets.
The complaint can be viewed here.