Compliance September 10, 2013

Co-Fiduciaries Ordered to Repay Plan

September 10, 2013 (PLANSPONSOR.com) – The Department of Labor (DOL) recently received a judgment from a district court, requiring co-fiduciaries of a Delaware retirement plan to deposit employee contributions and loan repayments.
Reported by

The DOL acted on behalf of employees of the Wilmington, Delware-based Progressive Services Inc., when it filed Harris v. Hirst, et al. (Docket Number: 1:13-cv-01466-UNA) in the U.S. District Court for the District of Delaware in August.

The lawsuit alleged that the company and its officers and co-fiduciaries, Michael and Peg Hirst, failed to deposit $53,809 in elective employee contributions and loan repayments to the Progressive Services Inc. 401(k) Plan from January 2009 through December 2011. In addition, the DOL found that the defendants failed to contribute $11,346 in mandatory employer safe harbor contributions to the plan during the same time period.

In a consent judgment resolving the suit, the defendants agreed to restore $70,735 to the plan, which included an additional $5,579 in interest that was awarded to it as restitution. The defendants were assessed a mandatory penalty of $14,147 and agreed not to engage in such practices in the future.

The full text of the judgment can be found here.

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