Compliance January 25, 2007

DoL Sues CT Firm for Misuse of Plan Funds

January 25, 2007 (PLANSPONSOR.com) - The Department of Labor (DoL) has filed suit against New Britain, Connecticut-based Macristy Industries Inc. and its president for allegedly misdirecting more than $1.8 million in cash balance plan assets.
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According to the DoL news release, the defendants are accused of violating the Employee Retirement Income Security Act (ERISA) between the fall of 2002 and the present by diverting $1,823,813 in plan assets to pay for company operations and filing false or no annual reports with the DoL. The company’s cash balance plan has approximately 286 participants.

“The department will not tolerate workers’ retirement savings being abused and used as a piggy bank for the convenience of management,” said Secretary of Labor Elaine L. Chao, in the news release.

The DoL suit seeks a court order requiring the defendants to restore to the plan all losses with interest, to disgorge all profits received and to require the company to file appropriate Form 5500 annual reports. The suit also asks the court to bar the firm’s president from service as a fiduciary to any ERISA-covered plan and to assign an independent fiduciary as trustee of the plan.

Macristy Industries Inc. is a holding company that owns Connecticut Stamping and Bending Inc., Tube Bends Inc., The Sunrise Realty Corp. and Plumb E-Z Manufacturing Co.

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