Compliance

Company Owner Personally Liable for Missing Contributions

By Kevin McGuinness editors@plansponsor.com | August 08, 2014

August 8, 2014 (PLANSPONSOR.com) – Charles David Snyder, fiduciary to the Cleveland-based Attevo 401(k) retirement plan, has been ordered by a judge to restore $143,481.42 to the plan.

Judge Christopher A. Boyko of the U.S. District Court for the Northern District of Ohio issued a consent judgment and order requiring Snyder to pay. The judgment resolves a Department of Labor (DOL) lawsuit, Perez v. Snyder et al. (Civil Action No. 1:13-cv-02474-CAB), which alleged the plan’s fiduciaries violated the Employee Retirement Income Security Act (ERISA) when they failed to remit participant contributions and loan repayments withheld from paychecks to the retirement plan.

As per the consent judgment and order, Snyder will begin making monthly payments to the plan on September 15, starting with an initial $50,000 payment. After that, he will make monthly payments of $6,000, concluding with a final payment of $27,481.42 on September 15, 2015. The judgment also requires Snyder to provide the DOL’s Employee Benefits Security Administration (EBSA) with proof that each payment has been made no later than 10 days after each due date.

An EBSA investigation determined that Cirric Inc.—the successor to Averrock Inc. and Attevo Inc.—and its sister company, Ruralogic Inc., were all fiduciaries to the Attevo 401(k) retirement plan. So were two of the companies’ owners, Snyder and Joseph Burmester. All were named as defendants in the suit and found by the court to be jointly liable for losses to the plan.

According to the judgment, if Snyder does not make his payments to the plan in a timely manner, the judgment will become immediately due from all defendants.

The judgment also permanently bars Snyder and Burmester from serving as a fiduciary or service provider to any ERISA-covered employee benefit plan, and appoints an independent fiduciary to administer and eventually terminate the plan.

As of August 13, 2013, the plan had 24 participants and $379,424.20 in assets.

The consent judgment and order can be viewed here.