403(b) Plan Fiduciaries Ordered to Restore Assets to Plan

A mental health services provider, with its tax-exempt status revoked, was sued by the DOL for failing to remit employee contributions to the retirement plan and a health benefits plan.

The U.S. District Court for the Southern District of Ohio issued a consent order and judgment requiring the fiduciaries of Day-Mont Behavioral Health Care Inc. to restore $141,666 to the defunct Dayton, Ohio-based company’s employee benefit health and retirement plans.

Data shows the organization’s exempt status was automatically revoked by the IRS for failure to file a Form 990, 990-EZ, 990-N, or 990-PF for three consecutive years. The mental health services provider ceased operations in 2018.

An investigation by the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) found that fiduciaries Gayle Johnson, Akil Sharif and Day-Mont Behavioral Health Care Inc. violated the Employee Retirement Income Security Act (ERISA) by failing to remit employee contributions the plans.

Under the terms of the consent order and judgment, the fiduciaries will restore $64,582 to the Day-Mont West Tax-Deferred Annuity Plan. These monies are due to any individuals who were plan participants from January 13, 2012, through August 5, 2016. The fiduciaries will restore these monies to employees who had voluntary employee contributions withheld from their pay that the company failed to remit to the annuity plan, or did not remit in a timely manner.

Additionally, the fiduciaries will remit $77,084 to the participants of the Day-Mont Behavioral Health Care Inc. Employee Benefit Plan—a health benefits plan. The fiduciaries will also pay a civil money penalty of $28,333 for willful violations of ERISA.

The court has permanently enjoined both Johnson and Sharif from acting as service providers or fiduciaries to any ERISA-covered plan in the future. AMI Benefit Plan Administrators Inc., of Youngstown, Ohio, will serve as the independent fiduciary to allocate and distribute the recovered funds.